Serious jump in unemployment

[mattnz]

http://www.smh.com.au/business/the-...moves-higher-in-september-20121011-27elt.html

Excerpt....

Australia’s unemployment rate rose to 5.4 per cent in September as softness in the national economy began to flow through to the jobs market.

The larger-than-expected rise follows a reading of 5.1 per cent in August and is the highest level of unemployment since March 2010, a two and a half year high.

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That is a huge jump in a short timeframe, 0.3%! You can lock in a 0.25% rate reduction next month now and could easily be a 0.5% reduction.

 

[Aaron Sice]

.......and the AUD will remain high regardless.

 

[Ausprop]

.......and the AUD will remain high regardless.

go you good thing!

 

[matto_]

Double edged sword. Higher unemployment - lower rates, but obviously not very good for Oz.

 

[HotRod]

Works out to be an increase in the number of unemployed at a tad just over 6% for the month.

 

[spludgey]

I heard today that while it went up 0.3%, there were 14500 additional jobs. Apparently the number of people looking for work rose.
What does that mean? People are worried about the economy and now need a job where previously they didn't? Or does it simply not mean anything?

 

[Scott No Mates]

All smoke and mirrors Spludgey - higher participation rate ie more looking, a few more jobs on offer - reflective of govt policy pushing mothers back into the workforce once kids go to school (it is preschool time for those who have dropped a bundle about 5 yrs ago thanks to the baby bonus).

 

[Indifference]

I heard today that while it went up 0.3%, there were 14500 additional jobs. Apparently the number of people looking for work rose.
What does that mean? People are worried about the economy and now need a job where previously they didn't? Or does it simply not mean anything?

All the variables are non-static. Ie. Unemployment rate, Participation rate and Population growth which incrementally increases the number of "eligible" individuals in the workforce.

So, for example, if population growth requires an increase in jobs of 16,000 per month, then the creation of 14,500 jobs falls short by 1,500. Hence the unemployment rate & the number of jobs created both print higher. This is one aspect of the issue...... another is the participation rate which fluctuates as people's circumstances change OR they just stop looking for work OR they have been looking for so long that the Government excludes them from the actively looking for work group OR they found an interim part-time job 1 day a week so are excluded from the "unemployed group" OR ..... etc...

Yet another variability is seasonal adjustments to account for the non-constant employment rate over a year due to significant periods, such as holiday periods etc....

Does this shed some light on why & how, we often see seemingly conflicting reports, other than lies, damn lies and statistics?

 

[Aaron_C]

The unemployment rate means what you want it to mean

 

[BayView]

I heard today that while it went up 0.3%, there were 14500 additional jobs. Apparently the number of people looking for work rose.
What does that mean? People are worried about the economy and now need a job where previously they didn't? Or does it simply not mean anything?

Additional jobs might simply mean a lot of casual and/or part time positions.

I would like them to state exactly how many full-time possies are being added each month. This is the real measure.

The number looking for work would say to me that there are more unemployed looking for work.

I'm an employer, surrounded by other businesses and other employees and employers.

All I hear is bad news.

Of course; not everywhere is bad, and mining is still going ok (but one of our customers reported this week that mining is slowing WAY down in employing - he works in the mines)

 

[DMY]

This reminds me of a big report on Tasmania's economy and future prospects for uni I just finished a few weeks ago. Sadly everything I had to say about Tasmania's economy was pretty poor with not much positive things ahead. Unemployment expected to continue to rise and the high AUD is actually becoming a big issue and negatively affecting exports and tourism. Continued exodus of youth and skilled. Revenue hugely reliant on government. Difficult lobbying groups against development. etc.

 

[mattnz]

I wonder if alot of people may be coming back out of retirement and looking for work to make ends meet. Would be a logical explanation for the conflicting statistics.

 

[Ausprop]

and the high AUD is actually becoming a big issue and negatively affecting exports and tourism.

it's really time to get over it and accept the AUD as normal now. if the only reason a tourist will go somewhere is because they get an extra 10 or 20 cents on their dollar conversion then it doesn't say much for that place as a destination

 

[Ed Barton]

I think a good (but not the only) measure of unemployment is people on the dole. I think this should be published, and it wouldn't take any time to compile.

If I was to become UE'd I would appear in the ABS UE stats but not centrelink stats. My spending, and effect on the economy, would not change.

If my sister became UE'd, she'd probably get a few hours here and there and be UE'd by dole stats, but not ABS stats. She would severely curtail her spending, and effect on the economy would change dramatically.

Somewhere in between, is someone who got a substantial redundancy and doesn't feel the need to get just any sort of employment and doesn't qualify for the dole. They'd appear in the ABS stats but not the centrelink stats. Their effect on the economy would be middle of the road, they'd tighten a little, but not be forced to eat cake.

 

[Aaron_C]

Don't forget there's a lot of people who are 'unemployed' but who are on other things like disability pensions etc.

 

[MarkB]

it's really time to get over it and accept the AUD as normal now.

Yep.

This (the high dollar) is looking like it's here to stay.

if the only reason a tourist will go somewhere is because they get an extra 10 or 20 cents on their dollar conversion then it doesn't say much for that place as a destination

That may be so, but we all live with budget constraints.

So even if they do still choose to visit Tasmania, or Sydney, or wherever, with the high dollar (which affects their conversion into our currency) they have less of our dollars to spend.

So they end up spending less in our money while they are here.

It's happening in NZ atm (also feeling the affects of a high dollar).



Tourists think twice as kiwi flies higher

The high kiwi dollar is having a negative impact on the experience tourists have here, according to Tourism New Zealand.

The New Zealand dollar is trading at more than US82c, up from US77c a year ago, and activities, meals and accommodation are seeming more expensive to people travelling here from overseas, according to the latest Visitor Experience Monitor which surveyed 4500 tourists.

While the number of people likely to recommend visiting New Zealand was unchanged for the 2011-12 year from 2010-11, tourists are taking part in fewer activities due to cost - 12.9 activities per visit each compared to 13.8 a year earlier.

Tourism New Zealand chief executive Kevin Bowler said the decrease was consistent with spending trends.

"Cost is a key consideration for visitors when determining the number of activities they will participate in during their holiday . . . it is clear the current strength of the New Zealand dollar is having an impact. While satisfaction scores around the quality of services have seen an improvement on last year, visitor satisfaction with the price of activities, food and beverage and accommodation has decreased."

 

[Ausprop]

a tourism council probably would say that... they need to sell the quality not the quantity. there was an interstign article on that this week, basically saying that pushing endless volumes of head count into the country is not the smartest way to generate tourism profits.

and even if they do spend less of the money it's ok because the recipients don't need as much because the price of just about everything they buy is held down by the buying capacity of the AUD

 

[DMY]

it's really time to get over it and accept the AUD as normal now. if the only reason a tourist will go somewhere is because they get an extra 10 or 20 cents on their dollar conversion then it doesn't say much for that place as a destination

Yeah I understand what you are saying. But even if we want to call the AUD 'normal' now it is still having a huge effect on exports being less competitive and is much higher against other currencies than the past.

There is no way people wouldn't take a 10-20% reduction into consideration when thinking about a holiday? Obviously, this isn't the biggest factor when people decide upon a holiday but it can't be shrugged off as minor.

 

[MarkB]

and even if they do spend less of the money it's ok because the recipients don't need as much because the price of just about everything they buy is held down by the buying capacity of the AUD

I disagree.

They're not coming to Australia to buy cheap imports.

They're coming to Australia to experience Australia - the people (who are paid in AUD), the food (locally produced), the experiences (which aren't imported from China).

Marketing slogans aside it's niave to think that a high dollar doesn't hurt the domestic tourism industry (and other exporters).

Tourists, like the rest of us, will cut their cloth so suit.

 

[Ideo]

The exchange rate is possible the last thing I consider when travelling.

I was in Europe in mid 08, just before the GFC and was paying double what I would pay now.

It was a brilliant holiday and I never really thought about the exchange rate.

It has an impact on purchasing from overseas. But not travel.