A great many more Australians will have a spring in their step this Christmas than anyone would have imagined last festive season, with Thursday’s jobs numbers looking unequivocally good.
Let’s start with female participation, which continued its long upward march to hit a record high of 60.1 per cent in November according to the Bureau of Statistics – what a difference from the 54 per cent participation rate when this century began.
Participation for both sexes rose to 65.4 per cent, and yet the headline unemployment rate did not budge. It’s still at 5.4 per cent in both seasonally adjusted and trend terms.
And gradually the shift away from under-employed, part-time workers to more financially robust full-time workers continued. November saw 15,000 new full-time jobs created and 7,000 part-time jobs in trend terms.
However, as the more volatile seasonally adjusted figure was nearly three times higher – 62,000 new jobs in total – it ‘s likely those numbers will strengthen even more in the new year.
The real test of strength
As I have noted many times, the jobs indicator that gives the best picture of the health of the market is ‘hours worked’, which must stay ahead of growth in the size of the workforce if the current under-employment problem is to be fixed.
November saw a 0.2 per cent rise in hours worked in trend terms. That’s heartening, though it’s half the rate of the surge seen May and June.
Nonetheless, the rise in hours worked since last November comes in at 3.4 per cent, which is more than double the 1.6 per cent growth in the size of the workforce.
So if even that lower monthly growth continued, the back-filling of Australia’s under-employment problem would continue.
Gang of youths
The youth unemployment rate is probably the weakest number in Thursday’s data, though even there the trend continues to be down – it currently sits at 12.2 per cent for 15- to 24-year-olds
That’s bad, though it looks a little better when put into its long-term context.
As the chart below shows, the post-financial-crisis surge in youth unemployment has not reached the awful levels seen after Paul Keating’s ‘recession we had to have’ in the early 1990s.
All of these numbers will put a smile on Treasurer Scott Morrison’s face going into the Christmas break – though of course, like any politician he will be taking credit for something that really is mostly driven by factors outside Australia.
A year ago we did not know that commodity prices would stay as high as they have done, thanks to Chinese demand, or that global growth would return so encouragingly to the eurozone and the US.
Many things have changed in those twelve months, and we are even seeing the beginnings of almost ‘normal’ inflationary pressure in the US and UK.
The pick-up in the global economy augurs well for jobs growth in 2018 – and we’ll need it, given there are still 710,000 unemployed and 1.1 million under-employed Australians.
What we really need in 2018 is not just an unemployment rate below the magic ‘5 per cent’ that economists regard as ‘full employment, but for hours worked in those jobs to be sufficient to bring a bit of price inflation in the shops, and wage inflation in our pay packets.
For now, though, let’s take the Christmas present these figures represent and look forward to better times.