With unemployment falling to 4.2% in December, we showed just how good this economy is, even with the challenges of the Coronavirus with its Delta and Omicron variants, associated restrictions and lockdowns, as well as border closures.

But it’s not a simple story because there’s good news, bad news and questionable news all wrapped up in this data on our economy from the Australian Bureau of Statistics.

Let me give you the data story first, so here goes:

1. Employment rose by 64,800 in December, with part-time jobs up by 23,300 and full-time jobs up 41,500. Total employment hit a record high of 13.242 million in December.  

2. The participation rate was unchanged at 66.1%.  

3. The unemployment rate fell from 4.6% to a 13-year low (since August 2008) of 4.2% in December.  

4. Hours worked lifted by 1% in December to 1,818.8 million, up 3.7% on a year ago. 

5. The youth jobless rate fell from 10.9% to a 13-year low of 9.4% in December. And the youth participation rate rose from 70.1 to a 13-year high of 70.5%.   

 6. Unemployment across states/territories in December: NSW 4%; Victoria 4.2%; Queensland 4.7%; South Australia 3.9%; WA 3.4%; Tasmania 3.9%; Northern Territory 4.2%; ACT 4.5%. Only in the ACT did unemployment go up from 3.8%! (That’s a story for another day!)

So nationally, the unemployment story is good news but now it’s time to recognise the questionable aspect of this news. You see, the problem is that this comes from December and Omicron didn’t really come here until late November, with its impact forming in mid-December.

So really, this is hardly Omicron affected or infected data! The January and February numbers are likely to be less champagne-popping, for two reasons.

First, the business closures we’ve been seeing will hurt the employment and unemployment numbers. Second, because of supply difficulties, it might be hard to get a bottle of champagne and if you do, it could be more expensive than usual!

Some of us might be largely unaffected, income-wise, by Omicron but there are lots of Aussies working less or no hours. Businessowners are coping with less revenue and profit as costs keep rising, which for many job-creating operations means losses!

That said, I believe our underlying economy is strong and provided Omicron’s hit to the economy weakens over February and becomes less worrying in March, then we’ll see a quick and powerful rebound of the economy.

And this might open the door to the bad news for borrowers, that is, interest rates could rise faster than we expect.

In today’s Australian newspaper, Max Maddison reported that “health officials are optimistic that the Omicron wave may have peaked in NSW and Victoria”.

Explaining the good job news, at least up until December, the Treasurer said the resilience of the economy was underpinned by the $60bn in household and business savings accumulated through the pandemic. “Westpac chief economist Bill Evans predicted the central bank would begin raising rates in ­August with a 15-basis-point rise followed by a 25-basis-point hike in October,” Maddison revealed.

Other economists cited also were able to look past our current Omicron challenges and speculate that the RBA could be forced to raise rates faster than has been generally expected.

In early 2021, the RBA thought the first rate rise would be 2024, but it has implied it looked more like 2023. Meantime, the likes of the CBA economics team, have been tipping a November rise and other economists were coming around to a similar view.

It’s all in the lap of the economic gods and Dr Phil Lowe, along with his board. But the big takeaway from this questionable data because of its pre-Omicron nature is that we do have a really strong economy that’s champing at the bit to rid itself of this damn Coronavirus and its many curve balls!