Labour force figures released today by the ABS show that the ongoing financial volatility on global markets and the deterioration in world growth is beginning to impact on the Australian labour market.
Full time fell by a very small 100 in February 2012 to stand at 8 063 600. Part-time employment declined by 15 400 to 3 380 400, driving a seasonally adjusted fall in overall employment of 15 400. This month’s employment result follows a very strong result in January 2012 where employment increased by 46 300. This reflects the fact that monthly results can be variable.
Encouragingly, the ANZ Job Advertisement series (a forward indicator of labour market activity) increased strongly in February, with vacancies now 10 per cent higher than they were in October 2011, suggesting that the Australian labour market may improve gradually over the course of 2012.
Against this background, the unemployment rate rose slightly, by 0.1 percentage points to 5.2 per cent (in line with market expectations) but remains one of the lowest rates of unemployment in the industrialised world and less than half that of the Euro area.
Nevertheless, today’s data suggest that the pace of employment growth has moderated, reflecting the impact of increased international uncertainty, the high Australian dollar and the cautious domestic household consumer.
The number of people looking for work also increased in February, by 16 400 to stand at 632 200, while the labour force participation rate declined slightly, by 0.1 percentage points to 65.2 per cent.
The Minister for Employment and Workplace Relations, Bill Shorten, said that businesses were understandably being more hesitant in their hiring intentions in a more uncertain global environment, and it was clear that they were instead giving their existing employees more hours of work instead of hiring new workers.
Indeed, aggregate hours worked increased by 21.6 million hours in February to 1 616.6 million hours.
This issue aside, and despite the current clear easing in labour market conditions, more than 700 000 jobs have been created since the Labor Government came to office in November 2007, an outstanding result given the rest of the world has seen the disappearance of more than 26 million jobs.
The Minister also noted that while some industries, like Retail Trade and Manufacturing, were clearly doing it tough in a difficult economic climate, other industries, like Health Care and Social Assistance and Mining, were recording particularly strong jobs growth, thereby providing many opportunities for Australian job seekers.
“Clearly, Australia is not immune from developments in Europe and, if conditions were to deteriorate further, this would inevitably put further pressure on the Australian labour market,” Mr Shorten said.
“The Australian economy, however, is built on strong fundamentals, with low debt and low unemployment and the Government has a proven track record of dealing with global instability during the GFC”, he noted.
“This Government will continue with the critical reforms and hard policy choices that have made our labour market the envy of the industrialised world, and will continue to get on with the job of building a stronger, sustainable and more secure domestic economy,” Minister Shorten said.
“In this regard, the Government is investing more than $11 billion in vocational education and training; $8.5 billion on employment services over the next four years to assist people back into employment; and $3 billion over six years for the Building Australia’s Workforce initiative, one of the largest training and workforce participation in this nation’s history.
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