This month’s unemployment news was the worst so far in the recession, with the headline rate rising from 4.8 to 5.2 per cent and some of the components looking bad as well (part-time replacing full-time employment, for example). The main good point was that the participation rate rose, so that the increase in unemployment was (in an accounting sense) largely due to people entering the work force, rather than to net job losses.
We are still doing far better than most other countries, and, if a global recovery emerges towards the end of the year, could still get by with only a moderate recession.
The government has reacted promptly with the fiscal stimulus, and the relaxation of monetary policy has also helped. But there doesn’t seem to have been much action to develop direct labour-market policy responses to unemployment (I discuss responses to unemployment here). And there’s a real risk that a contractionary budget will wipe out much of the benefit of the surplus (My Fin piece on this will be up soon).
fn1. In this context, I thought Turnbull’s response, treating every piece of bad news as evidence that the government’s policies have failed, while offering nothing positive of his own, has been both incorrect and politically tin-eared.