Are things improving? Declines in LR appear to point to two major factors at play here:
- Main sources of layoffs are flattening out, including construction and retail services. This is a sign of stabilization, but it is not a sign of impending improvement, as likelihood of these sectors aggressively rehiring staff is slim in the foreseeable future;
- Large movements from the LR are also a function of more people dropping out of the labour force and signing up for welfare benefits, while ceasing job searches.
“In the month, the estimated number of casual and part-time workers on the LR was 38,268 males and 32,590 females.” In August, the same figures were 37,749 males and 32,354 females. And so on: table illustrates
How do you explain this? A friend of mine used to be a broker, now drives a taxi. Per official stats, he is doing fine. Per his own state of mind, he is doing the necessary thing to survive. This is the difference between voluntary under-employment and self-employment and its forced version. CSO’s latest figures show the latter.
So per some commentators out there, “the unemployment rate, which didn’t rise this month – the first time that has happened since December ‘07” and this is an improvement. For me, this is like telling someone who’s house just burnt down that all’s fine – there won’t be another fire for a while.
I am still sticking with 14-15% forecast for 2009 peak unemployment, though it might be looking like a bit downside from 14% is possible. Who know – Christmas season (aka desperation levels in retail sector) will tell.
Now, to that other pesky issue – labour force participation. One issue of growing importance is youth unemployment. This is contracting per LR figures. But this contraction is likely masking two factors at play:
- there is significant seasonality - much of youth employment is part time and linked to higher activities in summer months (hotels, recreational etc sectors), plus
- there is a number of those who are simply dropping out of the labour force (either those who would have joined, but are not joining now that the jobs evaporated, or those who have been out of work for over a year and stopped searching, or those who have gone back to school or who continued in school transitioning to a new programme).
- 15-19 age group from 29.1% to 22.1% (7 percentage points down)
- 20-24 age group from 77.0% to 73.6% (3.4 percentage points down – less than half of decline in younger category)
- 25-34 age group from 85.5% to 84.7% (0.8 percentage points down)
- Economy-wide from 64.0 to 62.5% (1.5% percentage down)
Hmm… things are improving, rapidly. Dom Perignon 1988 uncorking time, yet?