Despite the hoopla that greeted the labour force data which showed employment up 60,000 in March, the labour market, and with it the economy, remain entrenched in a quagmire of funk.
To be sure, the 60,000 rise in employment was welcome, but that jobs growth needs to be put in context of the prior months of disappointingly weak job creation. Annual employment growth remains under 1 per cent which is well below the run rate needed to make inroads into unemployment.
Speaking of which – the unemployment rate stayed at a high 5.9 per cent in March. It is at least 1 percentage point higher than the rate seen when the economy is running at full employment. And interestingly, 5.9 per cent is the same rate that prevailed at the peak of the global crisis!
From a macroeconomic management perspective, the 750,000 people unemployed are a huge resource, untapped and unproductive. Many have limited or depreciating skills. Yet the government wants to make it harder for people to get additional skills, training and education. It is content to have the economy slothfully meander while it focuses on fourth tier policy issues.
The social costs of unemployment are even greater.
There are few signs of better economic times ahead. The commodity price lift is rapidly reversing. The housing boom appears to be on the cusp of something that could turn ugly. Wages growth is so low that the prospects for an acceleration in consumer spending growth is remote.
Where is the segment of the economy that will kick start GDP growth to a much needed 3 to 3.5 per cent? What are the policy makers doing to try to make this happen?
Unless there is something miraculous in the budget, get set for the unemployment rate to break above 6 per cent in the next few months and for the number of unemployed to excess 800,000.
As a mark of economic management, such results confirm policy failure.