Terry McCrann: The jobs timebomb ticking as a result of lockdowns

You are at the mercy of the greediest and the most hysterical people on the planet.

NSW has recorded 319 new COVID-19 cases and an additional five deaths. Picture: NCA NewsWire / Dylan Coker

The latest Roy Morgan jobs numbers will show that 28,000 people lost their jobs as the lockdowns in Victoria (the previous one) and NSW started to bite through July.

This took the Morgan measure of the number of jobless across Australia to 1.42m.

A further 1.33m were under-employed, meaning a staggering total of more than 2.7m Australians were either out of a job or working short hours. That’s nearly one in every five workers.

These numbers are also before the full impact of the NSW lockdown has played out and of course before the latest Victorian and Queensland lockdowns.

Back in March last year when the first national lockdown was imposed – and before the federal government had introduced the original JobKeeper – more than one in every four workers were either out of work or working short hours.

We won’t get the official ABS jobs data for July for another two weeks, and the way they do the data it will only be for the first two weeks of July – well before the NSW lockdown in particular had really started to bite. The Morgan numbers measure through the month.

The last ABS numbers had the jobless rate at just 4.9 per cent for (the first two weeks of) June. Morgan tells us it’s now really double that at 9.7 per cent.

The last ABS numbers had the jobless and underemployment rate at 12.8 per cent for June. Morgan says it is now 18.8 per cent in July.

More telling, it’s clearly got worse, much worse, than even the Morgan numbers indicate as the NSW lockdown will now run through August at least and has been joined by the new Victorian lockdown and the one in south-east Queensland.

Right now nearly three-quarters of the entire national economy is in lockdown and hurting jobs and businesses not only in the states directly impacted but across Australia.

There’s little prospect of the NSW lockdown ending anytime soon. The Queensland lockdown offers the best prospect; that leaves the big question mark over Victoria.

Surely at the very least, the clamps should be taken off regional Victoria after the reason for it – supposed virus in Wangaratta sewage – has been shown to be false.

A health worker takes a swab sample at a Covid-19 drive-through testing site in western Sydney. (Photo by AFP)

These jobless numbers reveal the continuing devastating impact of lockdowns. They will get worse as the full impacts flow through August.

But they’ve also been “locked into” official policy to apply right across Australia through at least the end of the year, with National Cabinet endorsing the ‘go early, go hard’ approach to any positive virus cases in the community.

The big question which no-one has really begun to focus on is what happens when we are 70/80 per cent vaccinated; and we are still getting cases and even more, deaths?

Will state governments not still resort to “go early go hard” lockdowns? And how can any business trust that won’t be the case?

Overnight Friday we also got some very good jobs numbers – but they were on the other side of the Pacific. Nearly 1 million jobs were added in the US through July. That’s equivalent to around 80,000 in Australia.

As I’ve explained, these US jobs numbers are probably the single most important – and certainly the most closely watched – in the entire world.

Why? Because the “smartest” (actually, the greediest if not also the dumbest) guys in the room” on Wall Street drive global share prices and bond yields off the back of them.

Overnight Friday, “they” decided they were ‘not too hot, not too cold’ Goldilocks numbers.

That yes, they showed the US economy was continuing to recover: the US jobless rate dropped an impressive 0.5 per cent to 5.4 per cent.

So bond yields were driven higher on the – soft – expectation that the US Fed would eventually start to tighten monetary policy.

But at the same time and somewhat unusually share prices also were driven higher, on the basis that the strong economy would produce strong corporate profits and that would be more significant than some small rise in future official interest rates.

The message for us is two layered.

Right now, Wall Street is going to bend over itself to see anything as positive for share prices. And what is positive for share prices on Wall Street is positive for share prices everywhere.

But, that does not mean they will necessarily be right. Every time, the plunge on Wall Street that triggers global plunges comes out of left field.

Let me put the two strands together.

If you want to try to have some understanding at what’s coming at you – what’s likely to be thrown at you – you have to understand what both those guys on Wall Street and in state government offices are likely to do.

You are at the mercy of the greediest and the most hysterical people on the planet.

Originally published as Terry McCrann: The jobs timebomb ticking as a result of lockdowns