6 December 2019
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Great unemployment numbers or great mistake or sour grapes?

Peter Switzer
10 December 2015

By Peter Switzer

I expect some of you heard me hollering with joy when the great unemployment and employment numbers arrived for November. You might have expected that I reeled with disbelief as the doubters raised another question mark over the numbers and the credibility of the Australian Bureau of Statistics!

Therefore I have to ask — one, are these unbelievable figures dodgy? Two, have I nailed this improving economy, given my optimistic views since the May Budget? Three, are the doubters a bunch of sour ‘grapers’, who can’t take it that their economic crystal balls should be thrown out and they should shut their cake holes?

I’m running with the affirmative for questions two, three and four, while being pretty happy with a ‘no’ for question one but note a small lack of confidence. Note, you could say I’m giving the ABS the benefit of the doubt and asking the simple question — could the nation’s number one statistician really make a monumental mistake on such as crucial number? Really?

You know the same lot, who have ridiculed these job numbers, criticised the October ones and you would’ve thought the ABS would have reacted to that bagging by checking out its methods.

October brought an incredible 56,100 jobs, while November brought an unbelievable 71,400. This compares pretty damn well to the consensus of economists who tipped, wait for it, a 10,000 slide!

Can you imagine the “what the #*?!’s” that were heard in the economists’ offices around the country? Of course, Treasurer Scott Morrison and PM Turnbull were popping champagne, while Tony Abbott would’ve been replaying his ‘favourite’ song “It should have been me!”

Thankfully, Joe has a Washington winter to warm his soul but he would be a bit pissed off!

Why?

Well, since September, this has been the economic story:

Unemployment has gone from 6.2% to 5.8%.

Employment has increased by about 145,000 in the three months September to November.

That’s the biggest back to back jobs gain in 28 years.

The participation rate rose from 65 to 65.3 in November, which makes the unemployment result even better to behold.

Business confidence, according to the NAB, has gone from 1 in August to 5 in November.

The Westpac consumer sentiment reading has gone from 93.9 in September, where pessimists outnumbered optimists, to 100.8, where optimists now beat pessimists, with 100 being the dividing point between the two groups.

Economic growth for the September quarter came in at 0.9%, after a low 0.3% in July. This was fastest economic expansion in 18 months.

I could go on about record car sales, record Chinese tourists, the fastest growth in business credit in six and a half years, company profits rising for the first time in five quarters and department store sales soaring by 3.5% in October as retail rises 0.5%, which means it’s up 3.9% over the year.

Sure, this is the good side of the economic story but there’s a hell of a lot of it. However, the one I like, which makes me think that we are creating a lot of jobs in an improving economy, is the data that came out on Monday with the ANZ job ads.

These forward indicators of employer intentions to create positions in their workplaces rose by 1.3% in November. These ads in newspapers and online have risen 16 out of 18 months and are up 12.3% over the year! On a trend basis, they’ve risen 25 months in a row!

I suspect record low interest rates, the tumbling Oz dollar, the big surge in house prices and maybe even the new Prime Minister are all changing our economic prospects.

I can't be sure I’m right but I like the run of good economic indicators — lagged and forward-looking ones — so I’m giving the ABS the benefit of the doubt. The numbers might be on the high side but the positive story they imply are on the money.

The critics are sour grape merchants and the economy and, eventually, the stock market will prove me right.

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