The ABS labour force data for May give me much greater confidence that Queensland is bouncing back nicely from the technical recession we experienced over much of 2014 due to the end of the mining boom (see chart above). Queensland’s seasonally adjusted unemployment rate fell from 6.6 per cent to 6.3 per cent in May. The data, which were positive at the national level, too (with unemployment falling from 6.1 per cent to 6.0 per cent seasonally adjusted), also suggest the RBA Governor was wrong to call for greater levels of public infrastructure investment to offset the impacts of the end of the mining boom. Infrastructure investment should not be used as a macro-stabilisation tool, but instead projects should be approved and funded based on their merits, after comprehensive cost-benefit analyses.
Also, see Pete Faulkner’s post, which offers a slightly less optimistic assessment than mine:
I recognise Pete’s point about the volatility of the seasonally adjusted data, but I’m also conscious of the backward looking nature of the trend estimates.