I was surprised earlier this month when I first saw the Queensland Government’s election campaign ad on TV noting the Government was creating over 1,100 new jobs per month. As I’ve noted previously, while the Government has had a number of economic policy successes (e.g. impressive budget management), employment has not been one of them. Jobs growth has fallen below labour force growth, pushing up the unemployment rate.
Based on the December ABS labour force estimates released last week, the Government can claim around 45,000 new jobs since it was elected in March 2012, or about 1,400 new jobs per month. But unemployment has risen from 5.5% to 6.6%. Unemployment in Queensland would need to be around 137,000 rather than 164,000 people for the unemployment rate to currently be 5.5% (as opposed to the actual rate of 6.6%). That implies the economy needed to have created 27,000 jobs on top of the 45,000 created since March 2012. That is, to have kept the unemployment rate at 5.5%, the Queensland economy needed to have created an additional 72,000 jobs since March 2012, or around 2,200 jobs per month, compared with the actual 1,400 new jobs per month (see chart below, in which I’ve plotted what employment would have to be to keep the unemployment rate at 5.5%).
Good point Gene. Another way of putting this would be that job creation would have needed to be 57% higher than it has been since March 2012 to keep the UR at 5.5%….assuming of course that the PR didn’t move up as more jobs were created (which it probably would)!
Very good point about the participation rate. Thanks Pete!