In October 2015, more people were in employment in Australia than at any other time in the nation’s history. More than 11,838,200 people were in jobs in the month, of which 69.0% were in full time employment. The result of the 0.5% increase in the number of people employed the previous month was that the participation rate rose modestly to 65.0%, which is towards the top of the band for the participation rate.
The recent history of Australia’s employment profile can be observed in the chart below, which includes the participation rate and separates employment into part time or full time.
To go straight to the dashboard and take a closer look at the data, click here.
The consequence of a solid increase in seasonally adjusted employment in October 2015 is that the unemployment rate dipped sharply in October 2015, falling to 5.9% on a seasonally adjusted basis, its equal lowest point since November 2013. The chart below shows the details and appears to indicate that the new ‘floor’ in the unemployment level is at that 5.9% rate.
To go straight to the dashboard and take a closer look at the data, click here.
The total number of people out of work, fell to 739,500 in October 2015, the lowest number recorded since May 2014.
Persistent unemployment rates can have something to do with the participation rate. That is, the number of people actively seeking work plays a part in determining the unemployment rate. If, for whatever reason, people cease looking for work, they ultimately are not recorded as unemployed. While that is a possible cause of an unemployment rate that is unable to shift lower, the simple counter to that argument right now is that more people are in work and the participation rate is at the upper end of its typical range, as is described above.
Thus, for attribution, it is relevant to turn to economy wide measures and away from those impacting individuals. Although the data is a little unhelpful in this regard, the shift in emphasis towards employment in services and away from production, appears to be well entrenched and possibly gathering speed.
It is well understood that there have been issues with the ABS’ Labour Force data and reporting for Australia. However, the ‘noise’ in the data may be beginning to settle down, rendering these results more reliable.
One data set of interest may be the seasonally adjusted hours worked per quarter. These are, in ABS Series 6202.0 Table 21, broken down between ‘market’ and ‘non-market’ sectors. The ‘market’ sector breaks out only agriculture, forestry and fishing and all other sectors are reported together. This allows some very limited comparison of the status employment in forestry sectors relative to other ‘market’ sectors.
The chart below shows how employment in agriculture, fisheries and forestry (AFF) and Other Market based employment has fared over the last five years.
Clearly, hours worked in the aggregated AFF sector have been declining. In fact, they are down 12.0% over the period set out in this index chart. For the other market sectors, hours worked have risen, but only a very modest 2.1%.
There are two immediate factors to take into account before relying on this data.
First, agriculture, forestry and fishing are quite different sectors. Hours worked in one could be up, while in another they could be down.
Second, this data is not a measure of labour input productivity. That is, it doesn’t take into account what outputs are being achieved from lower hours. All it measures is how much labour was used. Investments in capital, technology and education and training can all reduce hours worked while increasing productivity.
There is a lot more that needs to be said about these measures, but what is of note is the downward trend in hours worked in the combined agriculture, forestry and fishing sectors.
What does seem likely is that hours of work (and the number of people employed) are declining in forestry’s productive sectors. Just where exactly that ‘spare labour capacity’ is being deployed in Australia’s reasonably robust labour market remains to be analysed.
