The ABS released the Labour Force report for January this morning. Unemployment now has a six in front of it. Despite what some may argue this is a policy disaster – Treasury have estimated that the NAIRU is 4.5% – 5%. So the current rate of unemployment is a full percentage point above the NAIRU and tracking up. The other thing that is happening is that the participation rate is declining.*
I have plotted the unemployment rate and the participation rate (seasonally adjusted) from the latest ABS report.
One of the comments I made on Sky News the other night is that the law of land currently makes it easier for employees to lose their jobs than to keep their jobs. As much as the current federal government is loathe to change the IR laws this is something they will have to address sooner rather than later if they want to arrest that upward trend in unemployment.
* Yes, I know – somebody is going to say that’s the baby-boomers retiring in large numbers. Maybe. Reports of the baby-boomers retiring in large numbers are now nearly a decade old.