highlandspropertyblog

An interesting Budget week has passed. I got somewhat lost in the claims and counterclaims about numbers and Australia’s economic performance, so I decided to go looking at the ABS myself.  My interest was sparked by Wayne Swan’s claim that 950,000 jobs had been created in his term as Treasurer. (Wanting us believe of course that it was ‘all his own work’!)

As regular followers will know, I focus on jobs as a key indicator of how things are going. (Without one there’s not much money to spend to make the world go round.) I built the graphic below entirely from ABS job statistics. Wayne’s job creating claim seems to be close to the mark: 918,000 v’s 950,000. (The increase between the vertical green lines.) We can forgive him a little exaggeration, because as far as I can see, he under-claimed on real GDP growth over the period, claiming a 13% bigger economy, when I can see 14%.

But let’s dig a bit deeper …

Here are just some of my observations from this graphic:

1. We have indeed added more than 900,000 jobs since the start of 2008, but more than half of them were part time jobs.
2. In the same period the population grew about 1,800,000 … hmmm
3. A clear swing to part time jobs started gradually in 2005 (red arrow), and moseyed along until …
4. The economy was smashed by the GFC (blue vertical line) and …
5. Job numbers flat-lined for a year; full-time jobs fell dramatically; part-time jobs grew significantly as hours were wound back; and unemployment suddenly grew by 200,000+. Then …
6. The stimulus applied to the world economy, and the Australian economy (pink batts, school halls etc) started to take hold and job growth resumed like the old days (between the black arrows). But then we found …
7. That Governments can’t goose the economy on borrowed money forever and the stimulus was withdrawn. So …
8. Fulltime employment growth flat-lined (to the right of the black arrows), then grew slowly for a year or so, then in the last 3 quarters has flat-lined again (to the right of the yellow arrow). And meanwhile …
9. The relentless trend to part-time work gathered pace: particularly in the last few quarters.
10. And now we seem to have established a new lower trend, for now, in jobs growth (illustrated by the clear change in slope of the orange lines above the data)

So where to from here? … Who knows?

The politicians think they know it all, and would like us to think they can influence the outcomes. They can, a bit, but less than they think, I suspect. There are some big things here that look like they will trend on despite them, at least for a while:

1. Part-time jobs (now 30% of the total workforce) growing faster than full-time jobs
2. Increasing under-employment (people working insufficient hours, and below their training/skill level)
3. Increasing unemployment (it’s grown pretty steadily by 90,000 people to 683,000 since January 2011)