Part-time jobs boost offsets full-time employment fall

THE unemployment rate in Australia is currently 6.9 per cent, according to figures released by the Australian Bureau of Statistics last week.

The figure was very much in line with the expectations of Dr Chris Caton, chief economist of BT Funds Management Group. In his latest missive, Dr Caton has analysed the detail of the unemployment figures and comes to some interesting conclusions.

“On the face of it, this report is remarkably close to expectations, and hence should have little effect on markets. In fact it is a little weaker than that. For the second time in three months, the overall employment result has included a large fall in full-time employment offset by a large rise in part-time.

“Accordingly, the report may be friendly to credit markets” he says.

When you examine the detail of the figures as Dr Caton has, it reveals the following salient points.

Total employment fell by 3000 in June after having fallen 4100 in May. Year-to-date employment growth was only 0.9 per cent. This is the weakest ‘year-to’ growth rate since November 1997.

The estimated employment trend has risen weakly since January. The year-to growth in the trend is now 0.7 per cent, the weakest pace since September 1997.

Estimate of full-time employment fell by 39,400 to bring the total fall since last September to 97,200. In that same time, male full-time employment has fallen by 76,400.

As indicated , the fall in full-time employment was offset by an increase in the estimate of part-time employment.

That estimate rose by 36,400 following a drop in May of 14,100. The growth in part-time employment during the past 12 months has been an extraordinary 6.5 per cent.

This is the highest year-to growth rate since June 1995. Male part-time employment is estimated to have grown by an astonishing 13.4 per cent in the past year, the highest growth since October 1992.

Male employment fell by 13,500 for the month, while female employment rose by 10,500 to a record high. In the past year, female employment has risen by 1.9 per cent, while male employment has risen by just 0.1 per cent. As Dr Caton says, “who’d be a bloke?”

The number of unemployed persons in Australia is estimated to be 680,500. The unemployment rate has remained steady at 6.9 per cent.

The unemployment rate for females fell from 6.7 per cent to 6.6 per cent, while that for males rose from 7.0 per cent to 7.2 per cent, the highest since May 1999.

The blight on the economic landscape still remains the level of youth unemployment. The rate for 15 to 19-year olds seeking full-time work rose from 23.3 per cent to 25 per cent. This is the highest reading since February.

On a state-by-state basis the following trends are evident.

The unemployment rate rose in New South Wales, Western Australia and Tasmania.

It fell elsewhere. Queensland has the highest unemployment rate of 8.6 per cent. WA has the dubious honour of exceeding the 8 per cent rate for the first time since June 1994. New South Wales and Victoria have the lowest unemployment rates, at 6.2 per cent. Victoria has not had such a position since August 1999.

As Dr Caton sees it: “While there may be a little more optimism around about the overall state of the economy, it was always likely that the labour market would get worse before it got better. Unless we are sideswiped by further marked deterioration in the rest of the world, the unemployment rate should peak at 7.5 per cent or lower before the end of the year and employment should eventually do better.”

We await that with considerable interest.

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