Cue the interest rate falls, start up the dirges again, put on the downcast face — joblessness grew slightly in August, so forget all that nonsense from yesterday about a strong economy.
Well, at least, that’ll be the media coverage, complete with obligatory references to “patchwork economy”.
Australia’s employment growth does appear to have peaked at the moment, but its the resource boom states of WA and Queensland where growth has hit a wall, according to today’s employment figures from the ABS.
Seasonally adjusted unemployment rose 0.1% to 5.3% off the back off a 12,600 fall in full-time employment (part-time employment was up just under 3000). In trend terms, unemployment was steady at 5.1%. Participation was unchanged at 65.6%, but total hours worked rose slightly, up 4.6 million to 1.627 billion hours, confirming the growth story that emerges from yesterday’s GDP data.
It’s the state level that tells the more interesting story. The “two-speed” economy has never been reflected in the employment figures — Victoria and to a lesser extent South Australia have grown strongly since the GFC. But the big rises in unemployment were in Queensland, where it rose 0.5% to 6.2%, its highest since September 2009 (partly because of a jump in participation) and Western Australia, where unemployment rose 0.4% to 4.4%, with no participation rise to explain it.
NSW remains anaemic at best — unemployment rose 0.1% to 5.4%, yet again raising the question of when the O’Farrell government is going to open the state for business. Victoria was steady at 5.1% and South Australia dropped 0.1% to the same level. The so-called rust-belt states have been the steady performers of the last couple of years.
We may have a multispeed economy, but the story is never as simple as it seems.
What about Tassie?
So GDP up and unemployment up, mixed messages.
I think the commentary yesterday was right, the GDP was up case of Flood Recovery.
Now we are back to normal – where business and consumer confidence is poor.
I hate to say it but I think Kev was right about the mining tax.
What Australia is suffering at the moment is a thing called the “dutch disease”.
From Wikipedia:
[“In economics, the Dutch disease is a concept that purportedly explains the apparent relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector. The claimed mechanism is that an increase in revenues from natural resources (or inflows of foreign aid) will make a given nation’s currency stronger compared to that of other nations (manifest in an exchange rate), resulting in the nation’s other exports becoming more expensive for other countries to buy, making the manufacturing sector less competitive. “]
High commodity prices and Australia’s mining boom is forcing up the Australian dollars value.
However our “dutch disease” is WORSE then what the dutch faced with their oil boom in the 1960’s and 70’s. Because the dutch didn’t have this thing called the internet, ebay and $10 express international shipping back then. So it’s not just the manufacturers getting a caning, it’s Aussie retailers as well.
What Rudd should have done is introduce a tax on miners at the same rate as the Petroleum Resource Rent Tax that way he would have had a precedent. 40% tax at 11% profits is also much fairer than the Rudd 40% at ~5% profit.
Also the money from the mining tax should have been given back to the tax payers as tax breaks or even cash bonuses. Imagine how much easier it would have been for Rudd to sell his mining tax if he gave everyone a tax break rather than simply wasting it on more Labor waste. More tax breaks would mean more money for the punters to spend on retail therapy as well.
@ Bernard,
sorry to be pedantic
Paragraph 4
surely should be “off the back of
No?
“wasting it on more Labor waste”?…. well what else would you waste it on?