Market economists do not appear too concerned about the new ABS jobs figures released yesterday showing the national unemployment rate increased to 5.9% in February from 5.7% in January. There is a recognition that there is a lot of noise in the data and that other economic indicators, such as business confidence and job ads, are more positive (e.g. see Bloxo blames jobs on numberwang at MacroBusiness). We should be even more cautious about reading too much into the even noisier State-level data, which for Queensland were very disappointing, as Pete Faulkner noted in his post yesterday:
“In Queensland things were weaker still. The headline data showed a loss of 11,500 jobs with full time positions up 5,100 (after more than 30,000 were lost in Jan). The seasonally adjusted unemployment rate has jumped to 6.7% (from 6.3%); this puts Queensland in the unenviable position of having the highest rate of unemployment (seasonally adjusted) in the nation. Over the last 12 months the state has lost 38,500 (or 3,200 per month) with full time jobs down 66,100 (an average loss of 5,500 per month).”
The Queensland Treasury’s preferred ABS Trend measure of the State unemployment rate has increased to 6.4% (Chart 1), which must be worrying for the Government as it gears up for the next election.
The latest data confirm that the Queensland economy overall is not generating the jobs that are needed to employ all the new labour market entrants (e.g. uni, VET and school leavers) and re-entrants (e.g. parents with young children who wish to re-enter the workforce). After falling over the first half of 2016, employment has plateaued since then (Chart 2).
The latest surge of new entrants into the labour market in early 2017 has pushed up unemployment markedly in the original un-adjusted data (Chart 3). It is possible that the expected seasonal influx of new entrants has not been fully filtered out in the seasonally adjusted data, so the jump in Queensland’s seasonally adjusted unemployment rate to 6.7% may be over-stated. Again, we should be cautious reading too much into one month’s data. This is especially the case given Queensland had such substantial State Final Demand growth in December quarter. In other recent positive news, international tourism is at a record high in Queensland (see TEQ’s International Tourism Snapshot), with international visitors to Queensland increasing over 10% in 2016 to 2.6 million visitors.