Once again we saw the one great success story of the Turnbull/Morrison governments on display with better than expected jobs performance in January. The strong (at times record) jobs growth of 2017 now appears to have a second wind after a relative slowdown last year; January was the third month in a row of strong growth, especially in full-time employment. It’s one reason why the defeat of the Coalition isn’t quite as certain as many think — and augurs well for the Berejiklian government in NSW, which is presiding over a jobs boom.
According to the ABS, the unemployment rate on a trend basis was steady at 5.1% (December’s rate was revised up from 5.0% to 5.1%), while on a seasonally adjusted basis it was unchanged at 5.0%. In trend terms, employment rose by 24,900 last month, with full-time employment increasing by 16,800.
Better yet — and the real reason the government can be proud — is that the trend employment to population ratio rose to a 10-year high of 62.4%, while the trend participation rate was steady on 56.7% (a multi-year high). The ABS also pointed out that the 15 to 64 year old (the key employment cohort) employment to population ratio reached a historical high of 74.1%, with almost three of every four working age Australians now employed. In the year to January, 295,500 jobs were created on a trend basis, or annual growth of 2.4% — slightly better than the 2.3% in December and above the average annual growth over the past 20 years of around 2%.
NSW is the epicentre of jobs growth — in trend terms, unemployment is just 4.1%, and 3.9% in seasonally adjusted terms, after 47,000 jobs were added in January. It’s far ahead of any other state and that’s great news for a Coalition government going to the polls for a third term in March.
The jobless rate in Victoria is 4.5%, but it’s over 6% in Queensland, South Australia and Western Australia (where unemployment surged to 6.8% seasonally adjusted). Where’s the talk of a “two-speed economy” of the kind that marked the reverse situation of the mining boom a few years back?
It’s no coincidence, of course, that NSW in particular and Victoria are also the epicentres of immigration, rising population and infrastructure stress. But it also means that the coming federal election will be even more divided along state lines than normal, with Queenslanders and Western Australians reacting to quite different economic circumstances than voters in Sydney and Melbourne.
The figures were so good that they’ll keep talk of a rate cut from a worried Reserve Bank at bay for a few more months. Only a further steep plunge in house prices in the next three months and weak retail sales data would override the positive message the strong labour market continues to produce — even though Westpac’s Bill Evans has now joined AMP’s Shane Oliver in predicting at least two rate cuts this year.
The one dark spot continues to be wages growth. The jobs boom has barely shifted the dial on wages growth, despite much cheering from the government and the RBA. Yesterday the ABS released Average Weekly Earnings (AWEs) data for the six months to November which showed a rise of just 2.4% across the year — only a fraction above the 2.3% rise in the Wage Price Index in the December and September quarters. There wasn’t any acceleration in the second half of 2018 either — growth was uniform across the year, and only up a touch from the 2.3% rate in the six months to November 2017 and 2.2% in the six months to November 2016.
That’s one of several reasons why a federal government that has presided over a jobs boom appears to be getting zero credit for it from voters.
“Employment is once again growing very strongly — especially in NSW. So why are they getting zero credit for it from voters?”
Have they actually done anything to deserve credit?
Not only does immigration help the economy, but we also need immigration.
The current fertility rate is 1.81 (meaning each woman has an average of 1.81 children during her lifetime) meaning that in 30 years there will be a trend towards decreasing population, with a decreasing proportion of young working taxpaying Australians and a higher proportion of old non-working non-taxpaying Australians, on whom the government will have to spend more on health and age care, the money coming from the young who will put under increasing financial stress, and increasingly unable to afford children,
Setting off a vicious circle.
Canada grabbed the 18-year Saudi Arabian refugee not because of humanitarian reasons. It realised it needed her. She’s going to stimulate the Canadian economy. And also have children,
We should be grabbing as many migrants as we can, including refugees. There’s going to be declining supply of them.
This old furphy.
What happens when the migrants get old themselves? Who looks after them? More migrants?
The fact is that now people don’t die at 70, but at 80, 90 or 100, there are ALWAYS going to be large numbers too old to work. The retirement age might go up to 70, but not 80 or 90.
It means that unless we can get our fertility rate up to replacement level of 2.1, then we’re obliged to continue with immigration unless we want to to share the fate of Hungary or Japan, with a declining and aging population. China might be on the same path after its One Child Policy. Once 1-2 children becomes the norm, then it’s difficult to increase it.
And the problem with a declining population is…..?
Taxes apparently! But it will be much better for the poor old environment so I’m all for it!
A declining older population. The elderly tend to spend less, so the economy isn’t as active (less tax revenue). But the government has to spend more on health and age care. The shortfall has to be made up from the smaller proportion of the young in increased taxes, who are then more financially challenged and unable to afford to have children. And the fertility drops further from its current 1.81.
What you describe Wayne is the population ponzi scheme. Anything designed around perpetual growth has 40 years, tops. Let’s address the problem now rather than continue the hoax.
If we had a fertility rate of 2.1, then we’d have no problems. Australia’s population wouldn’t be increasing in the long term, and also wouldn’t be getting older. But it’s 1.81, and dropping.
It’s not a matter of perpetual growth. It’s a matter of avoiding recession.
An ageing and declining population creates problems. We could go the way of Japan which has had 30 years of recession.
And yet Japan has an ageing population, low immigration (in and out) an unemployment rate of 2.4%, zero inflation, and zero interest rates. Maybe Japan is the future. Maybe they are demonstrating how to live in a low growth future economy?
A 0% interest rate, a 0% inflation rate aren’t usually considered to be signs of a healthy economy.
No, no, this is the standard-issue ageing-will-roon-us patter from the Neoliberal Right.
In truth, we are well able to survive the quite minor costs of ageing.
FYI comparatively few people actually do genuinely useful and necessary jobs. Given the findings of the Royal Commission into finance industry shortcomings, precious little of what it does appears to genuinely benefit either their victims or society. Productivity taken from agriculture and the environment by science and technology has not spend diverted to greater leisure, but to greater waste to keep alive the existing primitive means of production and social relations.
There is a deliberate scare campaign regarding the costs of ageing that is intended, by deeming current levels of ageing support to be unsustainable, to allow the needs of the poor elderly to be concealed behind a helpless wave of the hands by the wealthy and the aspirationals so the latter protect their undeserved wealth from even the most inconsequential increases in taxation for that purpose.
Care to nominate which jobs you’d eliminate in order to use the current occupants to better use?
Government revenue has to come from somewhere. The elderly tend to pay little tax, and spend little, not providing jobs except in age care, so the government isn’t going to be getting much revenue from them (and currently they get overgenerous tax breaks). The young spend, creating jobs, and pay tax. And there’s going to be fewer of them. But the government will need to increase the tax burden upon them.
Your 3rd paragraph pings it – “ comparatively few people actually do genuinely useful and necessary jobs…”
To which I would add the 57 varieties of toothpaste/deodorant/detergent/bottled water (FFS!) etc ad nauseam.
““Employment is once again growing very strongly — especially in NSW. So why are they getting zero credit for it from voters?”
Why should they, when Labor never got any credit for even better consecutive numbers between 2009 & 2014? For almost all of that period, Labor kept unemployment at below 5.4%, whilst keeping participation rates at around 66% for most of that period…..all whilst wages growth remained above 3%.
Yet all Labor got was frequent attacks over a “debt & deficit disaster” etc etc.
Oh, & as Wayne has rightly pointed out, what has this government done to earn praise? Labor had POLICIES aimed at trying to get people into full time jobs, the Coalition have done nothing but demonise people on welfare, create a form of government subsidised indentured servitude (Internships), outsourced well paid Public Service jobs to their donors, cut penalty rates & done absolutely nothing about flagrant wage theft.
Because even the Liberals are hard pressed to advertise anything they have done to create the jobs. Howard didn’t create the mining boom, Labor didn’t create the GFC, Abbott/Turnbull/Morrison didn’t create the current global happy time and when Labor wins and inherits the Trump/Brexit headwins, they didn’t create that either.
But there’s a secondary point here too. Most of the working population already had jobs. Maybe the people who have gone from unemployed to employed are thankful to the Libs for it- but they are a small percentage. We’re talking about things like 94% of the workforce having jobs to 94.1%.
Meanwhile, that 94% who already had jobs anyway have seen their wages stagnate and the government actively undermine their job security and conditions. And you think they will be THANKFUL to the government? Rocks in your head.
Well spotted!
Exactly Arky. The government has very little impact on the employment outcomes
Not to mention that, of that 94%, a not immaterial number “enjoy” between say 1 and 5 hours work per fortnight and wonder why the hell they are categorised as “employed”, let alone be thankful for it. Still, can’t let the elephant of underemployment spoil a “good news” story.
I’m assuming that “the one great success story of the Turnbull/Morrison governments …It’s one reason why the defeat of the Coalition isn’t quite as certain as many think — and augurs well for the Berejiklian government in NSW… Better yet — and the real reason the government can be proud” is BK’s usual B/S boosterism.