- In the 6 months since March, employment has fallen by a total of 5,000 with full-time employment down nearly 59,000 only partly offset by a 54,000 rise in part-time employment (note the working age population grows by around 15,000 a month).
- The participation rate reached a record high of 66.0% in October 2010 - it has been easing back since then and in September, was 65.6%. In other words, 0.4% of the working age population has drifted away from employment or has stopped bothering to look for employment.
- The unemployment rate zig-zagged from 4.9% to 5.0% in the first 6 months of 2011. In the last two months, it has been 5.3% and 5.2%. This is still low on any comparison, but as the saying goes, a march of 1,000 miles begins with a single step.
And then there are wages - the bogeyman that so many people trot out as a reason why inflation is always about to "breakout" or that undermines Australia's competitiveness or some such scary stuff. The Labour Price Index (the best gauge of broad wages issues) rose 3.8% in the past year which is actually lower than the average wages growth since the start of 2005. Wages growth is moderate and this has helped under-score the deceleration in inflation over the last couple of years.
These facts show that there are not any broadly wages pressures. Indeed, with the slightly softer labour market conditions coming through over recent months, it is obvious that the risks to wages growth in 2012 will be to the downside.
All of this information confirms that the prolonged period of sub-trend economic growth is showing up in the labour force data. There are likely to be more indications of moderate growth in employment in the months ahead with a further uptick in the unemployment rate on the cards. Thankfully, the RBA knows this and its monetary policy actions will likely prevent a sharp rice in the unemployment rate. It knows it has to keep cutting - and it will. The labour force data over the next few months will help determine exactly when and by how much interest rates will be cut.