Photograph: Alamy
The latest labour force figures are a mixture of “Hmmm that’s not real flash”, and “OMG that is amazing”. But while some of the news about the creation of full-time employment deserved being excited about, the figures highlighted that the amount of joy you feel about the economy is very much dependent upon where you live.
In June the unemployment rate rose to 5.8% in seasonally adjusted terms, and stayed steady at 5.7% in trend terms. The big news, however, was that the employment growth in seasonally adjusted terms was all in full-time employment – increasing by 38,400 while part-time employment fell by 30,600.
This was very good news given my golden rule for employment figures is that full-time employment growth reveals the true strength of the economy. But given my second rule of employment figures is to trust the trend and treat the seasonally adjusted figures with suspicion, the news was less great.
I’m not sure why anyone would get too carried away with the monthly change in full-time employment in seasonally adjusted terms. About the only reason to follow it closely is if you had just chosen to give up caffeine and you needed a new stimulant.
A quick look at the change in full-time employment in both seasonally adjusted and trend shows how analysis of the seasonally adjusted figures pretty much involves coming up with synonyms for “erratic”:
Up 18,600; down 43,900; up 11,000; down 7,700; down 19,300; up 2,500; up 38,400.
The past seven months has seen an average move of 20,100 positions each month (either up or down) and ends up with a whole 400 fewer people in full-time employment than there was in November last year.
Trust the trend, and keep your heart palpitations to a minimum.
In trend terms, 705 full-time employment position were added in June – which doesn’t sound like a lot (it isn’t – a mere 0.01% increase) but it was the first increase in full-time employment in trend terms since January:
But June also saw a decline in the amount of hours worked – never a good sign. If we’re going to try to at least pretend the glass could be half-full if we squint our eyes, then we can note that the decline in the amount of hours worker looks to have slowed.
And if that is the case, it is a very good thing because the level of hours worked is perhaps a better indicator of economic health than is employment growth.
The past six months has seen a very strong slowing in the growth of hours worked. For now employment growth has held up OK, but unless the level of hours worked starts picking up sooner or later actual employment is going to fall:
The interesting thing about full-time employment is where it is coming from. Right now, if you are after full-time work, head to Victoria.
Not only is Victoria beating the rest of the nation for full-time employment creation, it is beating its own history.
In the past 12 months, an all-time record 87,800 full-time positions were created in the state:
And while, because of population growth, that doesn’t make it the biggest annual increase in percentage terms, the annual growth rate of 4.5% is the biggest since June 1989, so we’re talking some pretty amazing job creation.
And the growth is for both men and women – 42,800 extra full-time jobs for men, and 45,000 for women.
The 6.6% growth of full-time employment for women is the best for 20 years:
So strong was the full-time employment growth in Victoria in the past year, it was actually more than for the entire nation – as full-time employment fell by 20,000 in the rest of the country. Such a phenomena is not unknown, but it is unusual – especially given the relative weakness in the rest of the county:
It means even when looking at the trend figures it is hard not to be a bit sceptical of the figures. When labour force figures break records, it’s a little like seeing an athletic world record being set – you think that it is wonderful and then you hope you can trust the result.
The big disparity between jobs creation is a factor of the continued decline in full-time work in the mining states of Western Australia and Queensland, and New South Wales coming off the boil. While things are sunny in Victoria, Western Australia saw the fourth biggest fall of full-time employment in the past year – only during the global financial crisis have more full-time jobs been lost than the 34,957 lost in the 12 months to June:
Thus even if the result is a true reflection of the state of affairs in Victoria, it highlights the very uneven nature of the economy – not so much two-speed as a patchwork where some states are brighter than others, and some states, like NSW, which have been bright now seem to be losing some sheen.
