Snow Just In Time

There is a rainbow in the sky for the dismal employment data released this week, in the form of the Snowy Hydro Scheme expansion program.

There will be jobs galore, but not necessarily where they are needed. Nevertheless, the Australian workforce has proven itself adaptable to the fly-in-fly-out nature of the mining boom, and now readjusting post-boom.

Prime Minister Malcolm Turnbull’s announcement of the new expansion program for the Snowy Hydro scheme through more active use of the water resources already in place, is a good plan, and remarkably politically timely for the week. It will generate a significant number of new jobs, that would not otherwise have been in the pipeline. It also builds upon the job creation of other infrastructure projects now getting off the ground.

The February unemployment rate certainly spiked a bit, from 5.7% to 5.9%.

Now, saying it didn’t come in, in line with expectations, is a bit like saying the ball didn’t fall into the Roulette spot I picked for it? Oh, what a surprise?

All economic data is like this, and as I always like to remind people, these are surveys, not actual numbers. The volatility in all economic data series is a function of survey and collection techniques, and no number is ever the reality. Only ever a guide. Nonetheless, the guide given, by this number, is a concern.

Mind you, it comes with a lag, as labour data always does, to the growth level of the economy. We had that serious economic growth slowdown in the third quarter of last year where the economy went negative. That has now been corrected in the last quarter data, and we expect the economy is chugging along at a reasonable pace right now in 2017.

This latest employment data also reflects the return to study of thousands of students around the country. Which will have been a part of the story of the decline in part-time jobs. While seasonally adjusted data attempts to take out, or at least smooth such events, it nevertheless lingers as a ripple to be sure. Part-time employment declined 33,500. While full-time employment actually saw gains of 27,100.

The takeaway is that the economy saw a soft spot in the second half of the year, that has lingered into employment numbers in early 2017. Unemployment has spiked due to some seasonal factors as well, and while still quite concerned about this data, my forecast would be for unemployment to fall back to 5.8% or 5.7% on the next update.

Still, nothing to be sneezed at when you consider Mexico, USA, UK, Japan, all have lower unemployment than so-called sunny Australia.

This long term re-positioning of Australia to a higher core level of un-employment is purely a function of our own making. Read poor economic policy across the nation. A false and arrogant complacency is pushing this country further and further below the rest of the world.

On this note, the unemployment spike is a clear warning of a lasting socially unacceptable shift in the nature of life in Australia.

Clifford Bennett