In this whacky state of affairs we live in, where lockdowns can happen mid-way through tennis matches, and where travelling to and from various states and locales can stop and start with next to no warning at times, it is little wonder that the economy seems rather discombobulated.
The good news is things are improving. The bad news is we’re still in an employment recession.
The unemployment rate in January of 6.4% is still 1.3% pts above the lowest rate in the past 12 months – a level that is a recession in anyone’s language regardless of what is happening with the GDP.
But things are better than they were. At the worst stage last year the unemployment rate had risen 2.4% pts above the lowest rate of the past 12 months.
That improvement however is not terribly uniform – some states and age groups are doing better while others are clearly worse off.
Take men aged 35-44 – there are actually 0.8% more of them now employed than there were in March last year. So that’s great. Yes, there are issues around full-time work being replaced with part-time, but more employment is as a rule better than less – especially during a recession.
And yet employment for men aged 45-54 is still down 1.5% of March last year.
The same goes for women – those aged 35-44 have seen employment go up since March, those aged 45-54 have lost work.
And yet it is not older workers who are losing out – there are more men and women aged over 55 employed now than before the pandemic.
It is, shall we say, a bit nutty.
There’s also the weird issue of hours worked.
Generally as goes employment so go hours worked. This makes sense – if more people are working you would expect more hours to be worked.
Except in January while overall employment increased 0.2%, the hours worked fell 4.9% – the second biggest fall ever recorded.
It meant that the average monthly hours worked per capita fell from 83.9 in December to 79.7 – back to around where we were in June.
So does this mean the recovery is over and we have hit a wall?
Normally it would, but we are of course not living in normal times.
Some of the drop in hours worked can be placed on New South Wales and the lockdowns that affected parts of greater Sydney in the early part of January. And yet every state saw a fall in the number of hours worked – even Victoria which had a 1.3% increase in employment as it (for a time at least) became free of lockdowns.
But while this drop in hours worked is not a sign that the recovery is over, it is a sign that the economy remains utterly affected by the pandemic.
The main reason for the drop in hours worked is that people took a lot of time off – and a lot more than they usually do in January.
The reason they did so is because, as many of you will no doubt have gathered from messages being sent around your workplaces from the executive and bosses, companies have been scrambling to get leave that has not been taken off their books.
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