Workforce participation drops as Qld economy under-performs

Far North Queensland-based economist Pete Faulkner published a great analysis of the ABS labour force estimates for May on his blog yesterday (Jobs data in Qld is poor again):

Unfortunately the picture in Queensland continues to be a weaker one. Although the seasonally adjusted unemployment rate managed to fall slightly to 6.4% (from 6.5%) this is on the back of further job losses (down 1,700) with even more full-time jobs going (4,500). The only reason the unemployment rate has managed to drop is the decline in the Participation Rate to a level not seen since Sept 2004. Looking through the PR effect we see the Employment:Working Population measure down to 60.8 (it’s lowest since Nov 2014). The Trend data doesn’t provide any brighter notes with the Trend unemployment rate rising to 6.4% (from 6.3%…which was in turn revised up from 6.2%). Trend employment growth in the Sunshine State now stands at just 1% while the working population is increasing at 1.4%

The point about the participation rate is an excellent one. It is likely that many Queenslanders who are marginally-attached to the labour force have temporarily given up looking for a job because of the under-performing economy (see figure below).

partrate_May16 Also see the latest labour force brief from Queensland Treasury which clearly shows the divergence occurring between Queensland and the rest of Australia as the local economy under-performs.

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