Around Australia – and elsewhere in the world – employers, commentators and Treasurers are bemoaning labour shortages as economies wrestle their way back to something akin to growth. In the light of the increasing concerns about rising job vacancies, it seems a little ‘off’ that unemployment lifted from 4.6% to 5.2% in October. But, those are lockdown numbers and those days have already passed.
Here, we can see that after the horrors of the June quarter last year, unemployment trended down progressively to a low of 4.5% in August 2021. Since then it ticked back up to the 5.2% recorded in October.
It seems a little ‘old news’ to focus on unemployment, so in many respects, the economy needs us to be focussed on employment. Already there are retailers, hospitality outlets and many other struggling to find workers. Little wonder when the overseas students have headed home, migration has ceased and the house building sector has soaked up available workers – and why not, given it pays better than pulling a latte for an ungrateful caffeine addict.
While, as we can see here, the number of people in employment dipped in October, falling to 12.835 million people, the Participation Rate actually lifted 0.2% to 64.7%. That means that as people lost jobs, marginally more (in aggregate) were out looking for work.
Again, little wonder because by the end of October, there were job vacancies across the country.
As Ronald Mizen addressed in the Australian Financial Review, payroll data told a different story. More than 150,000 payroll jobs were added according to the ATO.
As economies reopen, the unemployment number will fall back again, and may well punch down in 2022, toward 4%, a rate that two years ago would have seemed unrealistic.
That will be a big problem for the economy because it means we will not have enough resources to support what could be a booming situation by mid-2022.
A similar message to that discussed in the earlier story on GDP. These supply pressures are showing are impacting inflation and in turn public policy makers are expecting wages to follow for the first time, in a long time. That would be no bad situation, especially in the lead up to interest rate rises which the RBA is anticipating in 2023 or 2024.
