As we close in on the end of 2009, the year that was almost the year from hell, a third month of solid employment growth has added to the flow of strongly positive data about the economy.
In fact we are ending the year in a far different position that in December 2008.
The fear and concern about banks, our finances, jobs so active a year ago, have vanished in Australia.
Not in the US, Japan and Europe, or the Middle East.
Instead of interest rates being cut, the ‘fear’ is now about rises and how far will they go.
(And ignoring the positive message that rising rates in this stage of a recovery send.)
No other economy can boast that huge change in mindset in such a dramatic 12 month period.
Jobs are being created, 100,000 in the past three months at the end of a year which was the toughest for two decades.
The unemployment rate in November 2008 was 4.5% and rising, last month it was 5.7% and falling.
Interest rates were chopped 1% in December 2008 to 4.5%. They are 3.75% after the third monthly rise in a row last week.
The Aussie dollar was trading around 65.70 US cents a year ago; yesterday it jumped sharply after the solid jobs numbers, to trade just under 91.50 US cents.
Retail sales are positive, car sales solid (thanks to tax rebates, meaning early 2010 could be weak), building approvals and housing finance also solid (thanks to the new home buyers scheme and the money spent on schools), the trade account is weak, but so is most of the world.
That’s also to be expected given the unwinding of those huge price increases last year for iron ore and coal.
Business investment was down in the September quarter, but is expected spending is rising and could end up the highest on record by June next year.
Construction is still solid and the outlook is for better times as the LNG resources boom starts kicking in the new year.
So with just three weeks to go, there are winners everywhere, including the 100,000 people who have got jobs in the past three months.
But three groups stand out:
They are the Rudd Government for its heavy stimulus spending at the right time. All the critics and naysayers have been proven wrong.
The Reserve Bank for getting its monetary policy easings spot at the end of last year and early in 2009, and for its trio of rises from October through December, and the Australian economy.
And consumers and workers who have proved themselves to be far more flexible and accommodating than any critic had thought.
Australians adjusted quickly on the way down (but not without ripping out $10 billion in cash in the final quarter of 2008 as ‘insurance’), put it back, responded to the stimulus, lifted their confidence levels, which then spread to business and surfed the emerging upturn to where 2010 looks like being a year of ‘normality’, except for the looming federal election and all the hot air (global warming!).
Unemployment could peak at current levels, and the improvement in jobs and faster economic growth will mean that the government debt burden created as part of the stimulus and the drop in revenue, will again be reduced when the budget figures are released next May.
In fact it could be quite possible that we could see that debt burden become negligible from 2011 onwards as more money flows into government tax coffers from higher earnings, higher employment and rising profits, while cuts to spending by Canberra add to the reduction.
Yesterday’s jobs figures showed that another 31,000 jobs were created last month, 30,000 of those full-time, as the Australian economy charges out of the mid-year slump and positions itself for another surge in 2010.
The month before it was a lot of part-time work (in November just 300 were created, according to the ABS).
In September most of the thousands of jobs created were full-time.
To have two months in three were full-time employment rising strongly is a sign the economy’s underlying strength is much better than seems from the mere figures.
The latest employment figures from the Australian Bureau of Statistics also show that the unemployment rate dipped back to 5.7% from 5.8% the previous month (the rate has steadied around this level since April).
Market forecasts have centered on just 5,000 new jobs and the rate edging up to 5.9%.
The ABS report had the rabbits in the markets punting on more rate rises in early 2010, as there will be if the strength in these figures continues.
After all, the Reserve Bank lifted rates in the belief the economy was strengthening.
As a result, the Australian dollar jumped by more than 1 US cent in the space of a few minutes to trade just under 91.50 US cents.
The strength in the labour market was also borne out by the rise in the number of hours worked, while the utilisation rate (a measure of underemployment) eased.
The number of people employed in November increased by 31,200 (0.3%) to 10.868 million, seasonally adjusted, the ABS reported. The rise in employment was driven by a rise in full-time employment, up 30,800 to 7.627 million.
The ABS said the seasonally adjusted number of people unemployed decreased by 13,300 in November, standing at 653,100.
The ABS seasonally adjusted monthly aggregate hours worked series showed a rise in November, up 13.4 million hours (0.9%) to 1,536.3 million hours.
The ABS said the participation rate in November was 65.2%, seasonally adjusted. The ABS seasonally adjusted labour
