The credit freeze has hurt Australia, some companies are laying off people, downgrading earnings and in retailing some are reporting falling sales.
And yet the ABS would have us believe that October was a better month than September for jobs.
In fact the ABS reckons that while Australians lost full time jobs in October, many more were offered part time employment.
The ABS’s monthly Labour Force figures, issued yesterday showed that overall employment rose 34,300 in October to 10,768,300 and the unemployment rate didn’t change from the 4.3% set in September.
"Full-time employment decreased by 9,200 to 7,688,200 and part-time employment increased by 43,500 to 3,080,100." It said "unemployment increased by 7,000 to 487,900.
"The number of persons looking for full-time work increased by 10,200 to 338,200 and the number of persons looking for part-time work decreased by 3,200 to 149,700."
The participation rate was steady on 65.2%.
But this is what the ABS said about September:
"Employment increased by 2,200 to 10,737,400. Full-time employment decreased by 15,400 to 7,706,800 and part-time employment increased by 17,700 to 3,030,500; unemployment increased by 21,700 to 479,600.
"The number of persons looking for full-time work increased by 4,400 to 326,800 and the number of persons looking for part-time work increased by 17,300 to 152,800."
Yesterday’s figures revealed that the September loss of full time jobs was worse than first reported: 23,200 against the originally reported 15,400, so the actual loss of full time jobs in October was much smaller again than the new figure for September.
On the face of it, with the credit crunch becoming a freeze from mid-September the impact in that month looked to have been muted.
As a result the market had been expecting an increase in jobless numbers of around 10,000 in October, with the unemployment rate rising to 4.4%.
But that wasn’t the case: fewer full time jobs were lost last month than in September, while more part time jobs were created.
In NSW, 17,500 people lost their jobs last month, seasonally adjusted, sending the unemployment rate up 0.4% to 5.2%.
The ABS said the jobless rate eased in Western Australia (2.2%), South Australia (5.3%) and Tasmania (3.5%). Victoria’s rate was unchanged at 4.4%, while Queensland’s rose 0.10% to 3.8%.
The series was reworked to achieve cost savings when the federal government cut the ABS budget by $22 million: the retail trade series was also reworked to cut costs by shrinking the sample, which is what has happened to the labour force sample.
Pressure on the ABS has forced it to abandon the ‘rubbery’ retail trade series and reinstate the old sample size. It seems pressure should now be applied to get rid of the new labour force series and go back to the older, more reliable figures.
If this is an OK number, then the Australian economy was a lot stronger in October than in September: for example building approvals plunged to a seven year low in September and retail sales probably fell by just over 1% in a seasonally adjusted series buried in the rubbery trend series.
That is the sort of news that should see unemployment rising: retail sales and building approvals have been falling all year.
Results and profit downgrades from the likes of Boral and CSR tell of rising pressures on their building products businesses in Australia, especially along the East Coast, likewise Brickworks, the country’s leading brick maker.
Motor vehicle sales fell by 11.4% in the month and car sales were down 13.8% from October 2007.
Car sales are now in danger of falling below last year’s over the final two months of 2008 as more and more people postpone or abandon purchases.
In its monthly VFACTS sales bulletin yesterday, the Federal Chamber of Automotive Industries (FCAI) said 79,105 new cars and trucks were sold in October, down 11.4% or 10,184 compared to October last year.
The slide left demand year-to-date also behind the corresponding period in 2007 with 864,037 new vehicles sold in the 10 months to the end of October, a fall of 0.9% compared with the corresponding period last year.
Toyota was the top-selling company in October with 18,705 vehicles, ahead of Holden on 10,171 and Ford on 8,567.
Toyota also was the market leading company year-to-date with 202,511 vehicles sold almost double Holden’s 109,771.
But the future of car sales remains in doubt as GE Money and GMAC have started laying off staff because they are quitting car finance and some other lines, such as personal loans and mortgages.
Automotive Holdings Group, the country’s largest dealer says it has replaced the GMAC and GE funding by reworking deals with others in its financing group, such as St George Bank, Ford and Toyota finance arms.
But Ford Australia is in the process of sacking over 800 employees and more people from South Pacific Tyres, and Qantas will start departing soon as those companies continue or step up retrenchment plans.
In the mid year economic update yesterday the Federal Government forecast unemployment rising to 5% by June next year and 5.75% by June 2010.
There are eight months for that to happen, so we face some rotten employment numbers in that time, if this present labour force series is accurate.
The Australian figures were much stronger than those in New Zealand where unemployment has hit a five year high.
New Zealand issues its jobless figures every quarter and the numbers of the September quarter were out this morning.
They showed the full extent of the country’s slide into a recession (two successive quarters of negati
