Different spin on jobless numbers

All the headlines today are full of doom with Australian unemployment hitting a 12-year high of 6.4 per cent. But behind  the headline number the news might not be as bad as it seems.

The highly-respected economic team at Commsec are putting a very different spin on the unemployment figures.

Their view is that “the real driver of the lift in unemployment is more people looking for work – not entirely a negative outcome. A healthier economy, improved job prospects, and more importantly a noted lift in job advertisement have resulted in more people searching for work, with an ongoing lift in the participation rate over the last couple of months.”

“The labour market at present can be described as being in a state of flux. Hours’ work lifted over the past year, while an ongoing shift from part-time to fulltime jobs is now taking place.

“In fact almost 110,000 full-time jobs have been created in the first seven months of 2014 – marking the best start to a calendar year in six years.

“And it is pretty clear that the transition in activity from mining to housing construction has been a case of so far so good, and more importantly housing construction will support a further lift in employment.

The Commsec team points out that “RBA business liaisons have commented on the noticeable lift in business hiring intentions and it suggests labour market conditions are heading in the right direction. “Employers are working existing staff harder but as profitability improves, management will feel more comfortable increasing head count.”

Let’s hope Craig James and his team are right!

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