New job statistics were announced this week – and some news outlets ran with a drop in the jobless.
But for once, US President Donald Trump’s favourite phrase “fake news” seemed somewhat appropriate.
Firstly, it’s true the unemployment rate fell to 5.7 per cent in April. An extra 97,400 found work in March and April. Good news, right?
Australians are working less, even though more of us have jobs. The unemployment rate fell to 5.7 per cent.
But some 35,000 of those jobs were part time. And the number of hours actually worked per month fell by 1.1 million.
Australian Bureau of Statistics reported that an extra 166,800 Australians found jobs. Yet again, the hours worked per month slipped by 3 million.
The Sydney Morning Herald quoted Macquarie Group economist James McIntyre as saying: “More of us are working, but less work is being done. This shouldn’t be happening in a strongly growing economy.”
“The jobs growth we are seeing reflects hours being reallocated among workers rather than a real increase in demand.”
And there was more bad news in the wages data.
“It’s official . We’re all going backwards,” blared one headline.
Annual growth is at the record low 1.9 per cent, and private wage growth was at 1.8. But consumer prices are rising 2.1 per cent.
Even Charles Dickens’ Micawber, written 175 years ago, knew those numbers spell misery.
The Australian Financial Review reported: “The most sustained collapse in real wages since the early 1990s recession and growing pessimism about the property market among heavily indebted households has cast fresh doubts over the budget’s forecasts for a rebound in consumer spending.”
The budget’s economic forecasts anticipate a sharp rise in household consumption, funded by savings built up since the financial crisis .
But a Westpac survey conducted last week shows only 7 per cent of households expect the budget to improve their finances during the next 12 months, with 33 per cent saying it would worsen. Half said it would stay the same.
‘‘Consumer sentiment remains ‘stuck’ below the significant 100 level, indicating that pessimists continue to outnumber optimists,’’ said Westpac chief economist Bill Evans.