Something for the optimists in today’s labour force data

My friend and former Treasury colleague Joe Branigan has found some good news for Queensland in today’s new labour force data. Earlier today, Joe tweeted an interesting chart (see below), showing Queensland has led Australia in the growth of hours worked (in trend terms) since March 2012, when the new Queensland Government was elected. You can check out Joe’s twitter feed at https://twitter.com/JoeBranigan71.

BilSeN4CAAIghms.jpg largeIt’s good Joe is being optimistic, because today’s labour force data for Queensland weren’t really that great at first glance, with the unemployment rate increasing from 6.1% to 6.2% (seasonally adjusted). However, employment growth was strong, and unemployment increased because of rising labour force participation. It could be the economy is recovering, as other data such as those on building approvals and retail trade suggest, and the slight increase in the unemployment rate simply reflects more people entering the labour market and looking for work, because conditions appear to be better. As such, I’m somewhat less worried about Queensland’s rising unemployment rate than I was last month.

For other coverage of today’s labour force data, see the Treasury information brief and Pete Faulkner’s post, Jobs surge. National coverage can be found at MacroBusiness: Boom goes labour market!

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10 Responses to Something for the optimists in today’s labour force data

  1. The Happy Hillbilly says:

    I think much of today’s (national) gain will end up being revised away Gene. The ABS have already mentioned the very significant contribution that sample rotation made to the result. Remember the astonishing jobs boom this time last year that turned out to have been the result of the incoming sample being composed of much better employment circumstances than the outgoing one?

    Labour market specialist Bill Mitchell is also suspicious of the size of the gain….
    “Today’s release of the – Labour Force data – for February 2014 by the Australian Bureau of Statistics can be taken in one of two ways. Either the strong full-time employment growth and rising participation rate is a turning point and the economy is improving or the ABS will revise the data downwards and things won’t look so rosy next month. That is the problem of data that exhibits (at times) big monthly shifts that are not reliable. But let’s hope it is the data shift is signalling better times to come. Full-time employment jumped (suspiciously) by 80,500 thousand, the largest monthly change since August 1991 and in the months that followed things fell apart quickly.” http://bilbo.economicoutlook.net/blog/?p=27278#more-27278

    • Gene Tunny says:

      Thanks, HH. Good point which I’ll have to look further into. It’s a pity the ABS didn’t make this fact more prominent on their website as it’s certainly important in drawing conclusions about yesterday’s data.

    • These are all fair points and we may well this suspiciously strong number revised down. However, what doesn’t appear to have got much attention is the fact that the Jan number was revised very strongly up..from a 3,700 decline to an 18,000 increase. Dec data was revised slightly lower (again) but the net change was strongly positive. Yesterday’s numbers were not all about Feb and the overall trend (even if we allow for some over-stating of Feb’s strength) was positive.

      • Gene Tunny says:

        Very good point. Thanks Pete!

      • The Happy Hillbilly says:

        Yes, good point. But didn’t something similar happen this time last year with a boom in the February numbers and January being revised upward as well? I might have that wrong though. It would be nice if it turns out to be the start of a period of sustained growth but I’m a bit doubtful given the coming headwinds.

  2. Katrina Drake says:

    My theory – the increase in participation rate is Abbott’s pregnancy pause . I have been looking to see where it will appear in the stats . The participation rate is being held up by women staying in their current jobs until the Abbot maternity leave scheme is announced.

    Ask any woman of child bearing age since the election campaign last August/September when they will have a baby – the response is ‘ When I hear the details about Abbots new paid maternity leave scheme. ‘ Women are delaying becoming pregnant until they know the rules for the scheme and the cut-off dates.

    All Australian women remember the Costello baby bonus , that meant babies born 30 June 2004 got nothing, and babies born just 1 day later received $5000.

    The difference with the timing of your next child at this time is 6 month salary. Big incentive to hang-on in the work force until after the election. But as no decision or policy is forth-coning, women are just left holding on, and holding on. Thus the participation rate is held up, as women are staying in their current jobs until the policy is announced and enacted.

    There will be a lot of babies named ‘Excel’ in 2015 – after the complex calculations that are taking place to calculate the best way to income replace/supplement with the complex web of maternity leave schemes and payments.

    I keep saying – that politicians should keep out of Australia’s bedrooms – they have no idea of what they are doing .

    Keep an eye on this one for us in the statistics Gene. I expect maternity wards and schools will be able to close for a year in a couple of years time, due to the flow on effect of Abbot not being able to implement or afford this election promise on paid maternity leave.

  3. Katrina drake says:

    Clarification : I am not saying that more women will have children because of the maternity leave scheme. But rather, if couples are planning on expanding their family – they are waiting until after details of the scheme are known and cut-off dates are known.

  4. Katrina drake says:

    You are welcome Gene. I enjoy your economic challenge for the day.

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