The state of the economy at the street level

[cynic]

http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1516/Quick_Guides/Unemployment

Given that the, rather dubious, single digit percentage, unemployment figures are derived from a household survey of approximately 56,000 people, counting anyone working as little as 1 hour, in the reference week, as employed, I fail to understand how anyone can reasonably accept this as truly representative of the state of Australia's labour force.

 

[Wysiwyg]

Given that the, rather dubious, single digit percentage, unemployment figures are derived from a household survey of approximately 56,000 people, counting anyone working as little as 1 hour, in the reference week, as employed, I fail to understand how anyone can reasonably accept this as truly representative of the state of Australia's labour force.

Maybe the Government wants people to keep spending. A rising unemployment figure would see households tighten their budgets and hence slow the economy even more.

 

[McLovin]

Maybe the Government wants people to keep spending. A rising unemployment figure would see households tighten their budgets and hence slow the economy even more.

Neither the government nor the ABS come up with the definition, the ILO does.

 

[Wysiwyg]

Neither the government nor the ABS come up with the definition, the ILO does.

The Australian Gov. supports the Org. and quote the figures.

The Australian Government supports the ILO’s mandate and objectives in promoting social justice and decent work for all in Asia, the Pacific and the rest of the world.

 

[qldfrog]

Neither the government nor the ABS come up with the definition, the ILO does.

True, the whole world tries to fudge numbers: interesting explanation here for example:http://www.abc.net.au/news/2012-05-14/janda-doing-a-job-on-employment-figures/4009594
in my opinion, unemployment figures with this definition are basically worthless, better use: as you pointed underemployment rate even if it is a bit weak as a definition or much better in my opinion, a comparison of hours worked
That would be a real indicator and is available somewhere in the ABS,
but we should not focus on this unemployment rate or try to do decade long comparisons; hours worked vs working age population would be a better but more scary figure But all is good as the traffic has increased on the commuting road!

 

[McLovin]

The Australian Gov. supports the Org. and quote the figures.

And?

 

[Klogg]

And?

It's government funded, it must be a conspiracy... lol

 

[OmegaTrader]

I don't know in other states but in WA there seems to be a lot of commercial vacancies for lease around Pert

My analysis for the day.

 

[McLovin]

True, the whole world tries to fudge numbers: interesting explanation here for example:http://www.abc.net.au/news/2012-05-14/janda-doing-a-job-on-employment-figures/4009594
in my opinion, unemployment figures with this definition are basically worthless, better use: as you pointed underemployment rate even if it is a bit weak as a definition or much better in my opinion, a comparison of hours worked

Are they really trying to fudge numbers? The dictionary definition of unemployed is "without a job". If someone is working 5-10 hours/week and wants to work more hours they may be a lot of things, but unemployed is not one. It's not like the ABS hides the underutlisation rate or hours worked, they're in 6202.0 every quarter. Underutilisation also includes discouraged job seekers who would otherwise not show up in the participation rate.

While the number may not pick up things like the casualisation of the workforce (whatever happened to NAIRU!?) it still has plenty of value as a pendulum in measuring the state of the economy.

It's government funded, it must be a conspiracy... lol

That seems to be the consensus.

 

[Wysiwyg]

Neither the government nor the ABS come up with the definition, the ILO does.

And?

 

[qldfrog]

Are they really trying to fudge numbers? The dictionary definition of unemployed is "without a job". If someone is working 5-10 hours/week and wants to work more hours they may be a lot of things, but unemployed is not one. It's not like the ABS hides the underutlisation rate or hours worked, they're in 6202.0 every quarter. Underutilisation also includes discouraged job seekers who would otherwise not show up in the participation rate.

While the number may not pick up things like the casualisation of the workforce (whatever happened to NAIRU!?) it still has plenty of value as a pendulum in measuring the state of the economy.

but why this focus on a non representative number vs for example hours worked; or even better the actual income from hours worked;
as i said above and to paraphrase: if a rocket scientist is employed by nasa 60h a week or as a janitor in a jim's franchise 3h a week (or even full time), is that really the same thing? It is by the figures mentioned;
IMHO the current unemployment and even underemployment figures are maybe worthwhile for a month to month or even quarter to quarter comparison but it does not take changes in society, the move to low paid job, service jobs, etc.
Anyway, if everyone is happy to believe that Australia is in a booming state with low unemployment 3% GDP (from memory) growth etc..all is good, and psyche being this important in the economy, HArvey Norman will see more sales, more tax revenues, etc etc i can run with the tide too.
I have learnt early enough that figures and facts, or being right or wrong does not matter for the economy.

 

[Smurf1976]

I wonder if this will have broader consequences?

http://www.wsj.com/articles/south-k...iles-for-u-s-bankruptcy-protection-1473002745

Hanjin is currently the largest shipping company in Korea, operating approximately 60 regular lines world-wide, with 140 container or bulk vessels, court papers said. It is ranked as the world’s ninth largest container shipping company, transporting over 100 million tons of cargo a year.

Its failure would be the largest container-shipping failure in history, dwarfing all previous carrier bankruptcies.

I'm thinking of possible flow on effects with goods stranded at sea. So things like manufacturers who run out of parts, because they're stuck on the ships, and have to stop production.

Businesses go broke, that's life, but this one occurs to me as possibly being of broader significance in terms of economic effects globally? Also it is of itself a sign that things aren't great at least in the shipping industry.

 

[qldfrog]

I wonder if this will have broader consequences?

http://www.wsj.com/articles/south-k...iles-for-u-s-bankruptcy-protection-1473002745



I'm thinking of possible flow on effects with goods stranded at sea. So things like manufacturers who run out of parts, because they're stuck on the ships, and have to stop production.

Businesses go broke, that's life, but this one occurs to me as possibly being of broader significance in terms of economic effects globally? Also it is of itself a sign that things aren't great at least in the shipping industry.

Yes I saw that and interpret it as a canary but I am pessimistic; unemployment is going down and the commuting road is busy so not yet in australia;
On a personal finance side, i am reducing my exposure even more and has been going full bear for the last month.
Major crashes never happen when everything seem to go bad..so with maxed index and calls of rate going up again, we are ready to have one , more now than a year ago in my opinion...time will tell

 

[sptrawler]

On a personal finance side, i am reducing my exposure even more and has been going full bear for the last month.
Major crashes never happen when everything seem to go bad..so with maxed index and calls of rate going up again, we are ready to have one , more now than a year ago in my opinion...time will tell

Not so easy, when you're self funded and interest rates are less than 3%.

Have to be very selective and try to think outside the square,by the way, has any body seen the square.
I was in Perth city today, traffic very low, no problem crossing St Georges Terrace.

 

[McLovin]

but why this focus on a non representative number vs for example hours worked; or even better the actual income from hours worked;

Because the number and the change in the number is a representative proxy of the economy, in the same way GDP growth is. Neither are supposed to be catch-all statistics, and both have flaws, as would using hours worked. In the end when unemployment is 5% the economy is going well, when it's 10% it's not.

IMHO the current unemployment and even underemployment figures are maybe worthwhile for a month to month or even quarter to quarter comparison but it does not take changes in society, the move to low paid job, service jobs, etc.

One statistic is not supposed to measure everything going on in an economy. The point has been made several times already that the unemployment rate is used to pick up cyclical changes not structural ones. That's why the ABS release a plethora of other statistics; weekly earnings, household income, hours worked, household spending, inflation, retail trade, building approvals and on and on. They're all there for anyone who cares to look.

 

[McLovin]

Because the number and the change in the number is a representative proxy of the economy, in the same way GDP growth is. Neither are supposed to be catch-all statistics, and both have flaws, as would using hours worked. In the end when unemployment is 5% the economy is going well, when it's 10% it's not.

I should add, I don't disagree with your point that underemployment should receive more coverage rather than just the headline number. So should youth unemployment and unemployment in the over 50's which is probably what drives the difference between unemployed and underemployed. You can't blame the ABS though, they report the numbers they're there for anyone to see. In many ways it comes down to who uses the data. An financial market participants or the media are more interested in the immediate economic cycle, not long run structural changes that might take a generation to show up. And that's probably why the headline rate is the more important number for the users of 6202.0.

 

[qldfrog]

You can't blame the ABS though, they report the numbers they're there for anyone to see..

True, and probably too hard for the media and population to discuss, as a result you have to head to the raw data or read between the lines of the next AFR.
The risk is the numbers claimed right and left do not match what the overall population lives/feels and results in the general brexit/Trump mood.Why does this very thread exist?

 

[McLovin]

The risk is the numbers claimed right and left do not match what the overall population lives/feels and results in the general brexit/Trump mood.Why does this very thread exist?

Yes that is a risk, but the hollowing out of the middle class shows up in lots of statistics, not just unemployment. I'll give you two.



And...



The second one is alarming. Even worse is what they're dying from. Liver disease, drug and alcohol related deaths and suicide. The surge in drug and alcohol related deaths is shocking. It's only happening to whites, which kind of explains why they're turning up in droves to support Trump.

The system in America is so stacked against you unless you get yanked out of the right crotch. I was wandering around LA on Sunday afternoon and seriously it would suck to be poor in America, once you fall through the gap there is no way back.

 

[qldfrog]

definitively not a good trend in the west if you are white, male and above 40!!!
I bet the economy at the street level has a different meaning in LA, hasn't it

 

[CanOz]

definitively not a good trend in the west if you are white, male and above 40!!!
I bet the economy at the street level has a different meaning in LA, hasn't it

Canada, Australia and Europe look fine qld frog.