July 2013 Employment

The July employment numbers depict a healthy economy, quite at odds with the growth numbers (‘000):

Although job creation dropped (and seasonally adjusted numbers suggest relative job losses), 2013 so far has been a better year for job creation than 2012 was (‘000):

A net 200k jobs were added for the whole of 2012, compared to 900k for the first seven months of 2013 alone. But job creation is no more than keeping pace with the growth in the labour force (log annual changes):

[Note: the “high” growth rates seen in 2011 were partly due to a concerted effort to register illegal workers]

As a result, the unemployment rate continues to hover around the 3.0% level as it has mostly done since the beginning of 2011:

These kinds of conflicting signals drive me nuts. On the one hand, nominal national income growth (aka profits) is still decelerating and capacity utilisation is creeping down; on the other hand inflation is accelerating, while employment and wage growth are pretty strong. The one argues for loosening fiscal and monetary policy; the other suggests a bias towards tightening. It’s a heck of a tightrope to have to walk.

Technical Notes:

July 2013 Employment report from the Department of Statistics (warning: pdf link)