The employment outlook is definitely souring, despite the confusion from the latest labor force numbers from the Australian Bureau of Statistics.
The number of jobs rose 1200 (tiny, but still a rise), the number of unemployed jumped, as did the number of full time jobs, which offset a fall in part time work.
The sharp rise in the unemployment rate to 4.8% last month from 4.5% in December gives another clue. It was the biggest rise for some time and took the rate back to mid 2006.
Consumers seem gloomy about the employment outlook, according to another survey from Westpac and the Melbourne Institute. Employment expectations are at a 26 year low.
But there has been a sharper, 0.7% rise from January, 2008, when the unemployment rate was 4.1%.
Look back to the way the number of unemployed has risen in the 12 months from January 2008. The slowing pace of economic activity has definitely pushed the number of jobless up significantly over the year. Unemployment has risen by around 84,000 people from January last year to last month: from 456,100 to 540, 200 last month.
That, according to the ABS, was a rise of 18.4% from January last year, to last month.
Growth in the labour force has slowed from well over 2.5% to just 0.9%.
Australia needs growth of around 2.3% a year to stop unemployment from rising.
Federal Treasury last week said that unemployment was expected to grow by around 300,000 over the next 18 months and peak around 7%. The Reserve Bank expects the number of jobless to increase "materially" over the next year or so.
Looking at the jobless numbers over the 12 months gives a better understanding of the way the economic slowdown is affecting employment, despite what again appears a skewed result from the ABS’s latest figures (using a smaller sample).
The ABS said that overall employment last month "increased by 1,200 to 10,742,100. Full-time employment increased by 33,700 to 7,670,700 and part-time employment decreased by 32,600 to 3,071,400.
Unemployment "increased by 36,800 to 540,200. The number of persons looking for full-time work increased by 29,900 to 381,300 and the number of persons looking for part-time work increased by 6,900 to 158,800"
The participation rate rose to 65.5 in January, up 1% as more people seemingly looked for work. This doesn’t quite sit properly with yesterday’s consumer confidence figures which fell for a second month, and remain negative.
With the 0.3% rise to 4.8% in the unemployment rate, the male rate was higher; 4.9%, than females on 4.7%. More females were employed in January, compared to January, 2008 and slightly fewer men were in employment.
The market had been expecting a loss of jobs in January: most forecasts had centred a fall in total employment of around 18,000, a jobless rate of 4.7% and a participation rate of 64.9%. Inexplicably the ABS says 1,200 jobs were added.
Still even at 4.8%, the Australian jobless rate is still significantly less than the 7.6% in the US. Japan’s rate has started surging, hitting 4.4% in December, from 3.9% the month before. Rates in Europe are well over 7 and 8%, In Spain its 14%.
In Britain this week, the jobless rate hit 6.3%, or 1.97 million in December. The number was expected to top the 2 million mark in January. The Bank of England said the economy was in "deep recession" and would contract by 4% in the early months of this year.
But Australian housing has started perking up, despite the gloominess in the consumer surveys and among business.
The National Australia Bank said this week the gloominess of business worsened last month and is now at record lows.
Yesterday it provided a detailed look at the December quarter, and there was little improvement.
The survey found that confidence in business is at its worst since the onset of the 1990 recession and will deteriorate even more as Easter approaches in April.
Business confidence plunged to a record-low in the December quarter and has now worsened for four consecutive quarters, since hitting a peak in late 2007, according to the NAB yesterday.
"This represents the largest annual fall in business conditions since entering the 1990/91 recession," the report said.
A plunge in the employment measure weighed down business conditions, with profits and trading also falling.
The survey’s business conditions measure fell 12 points in the December quarter to minus-16, the lowest reading since September 1992 when Australia was emerging from the last recession.
"Businesses expect conditions to slow significantly further in the March quarter of 2009," the report said.
NAB’s business confidence measure dropped by 24 points to minus-31 in the three months to December, the lowest reading since the series began in 1989.
