There were more signs in the February labour market data from the Australian Bureau of Statistics that confirmed that the Australian jobs market is weakening towards a slide.
Annual growth in new job creation slipped under the long term growth rate for the first time for more than four years in February, growth in full and part-time jobs is now running under the long term average for a second month in a row while hours worked dipped as well.
It’s a sign of the rising downward pressures on job creation – and this happened without any impact from the bushfire and the COVID-19 virus, according to the ABS report.
The news was overshadowed by more volatility in financial markets, the RBA’s rate cut and big stimulus/backstop easing package yesterday afternoon.
The weaknesses though were the early signals that the RBA and Treasury have been looking for as they prepare to support the sagging economy through the COVID-19 crisis.
The fall in the unemployment rate to 5.1% from 5.3% in January (both seasonally adjusted and trend or 5.1% on a revised trend basis) was not the real story as many media reports suggested.
Nor was the fact, as the ABS said, that the trend jobless rate remained steady at 5.1% for the third month in a row in February.
It was an emerging structural weakness in the jobs market.
For example, the ABS said 241,000 jobs (on a trend basis) were created in the year to February, a growth of 1.9%, and under the 2.0% long term rate seen over the past two decades.
The participation rate also dipped 0.1% to 66% as workers dropped out of the labour market in the wake of the impact of the bushfires and the early days of the great COVID-19 escalation.
Seasonally adjusted employment increased by 26,700 from a month earlier, 20,000 of which were part-time workers, while on a trend basis, 21,000 new jobs were created.
All well and good but the ABS pointed out “There was no notable impact on February 2020 Labour Force statistics resulting from the recent bushfires or COVID-19. The February reference period was in the first half of the month and pre-dates the notable increases in confirmed cases in Australia of COVID-19.” In other words too late to pick up any job losses in the last two weeks of February. and no impact on employment in tourist and regional areas from the fires (such as the NSW South Coast).
“Over the past year, trend employment increased by around 241,000 people, a rise of 1.9% which is below the average annual growth over the past 20 years of 2.0% and the first time it has gone under the long term average since late 2015.
Full-time employment growth (1.5%) was again below the average annual growth over the past 20 years of 1.6% and part-time employment growth (2.7%) was also below the 3.0% average annual growth over the past 20 years.
The trend monthly hours worked eased by less than 0.1% in February and rose by just 0.8% over the past year. This was lower than the 20 year average annual growth of 1.6%.
