Rosy job numbers straight out of Covid-19 Disneyland

Scott Morrison says high vaccination rates are the key to economic recovery. Picture: Gary Ramage

Official statistics are often so far behind the play all you can do is shrug and look past them to understand what’s really happening. A jobless rate of 4.6 per cent? Tell ’em they’re dreamin’.

The July labour force figures come from a happier, magical place: Covid Disneyland.

The survey was taken from July 4 to 17, covering the second and third weeks of the Greater Sydney lockdown, when daily infection numbers were running at an average of 33, then 96, while Gladys Berejiklian was fiddling with lockdown lite.

Victorians, too, were in clover, between purgatories four and five, with a sprinkling of “doughnut days” of zero cases over that period.

Thursday’s figures miss the labour-market squeeze from broader and stricter stay-at-home orders and so have been ignored by market watchers and forecasters. Some who lost jobs and can’t look for work aren’t counted as unemployed as they’re deemed out of the labour force; others who still have a job, but did no work, are defined as employed.

Right now, hours worked is a better measure of economic slack. In July, hours worked fell by 7 per cent in NSW; in June, hours fell by 8 per cent in Victoria. Underemployment is creeping up again.

The bad news on employment, production and investment is in the pipeline, and will be rolling through over the next few months as lockdown reality bites. The unemployment rate is likely to rise by a full percentage point, reflecting job losses in the hundreds of thousands.

One advantage we have now in reading the play is real-time tools on spending and mobility from banks and other digital surveillants.

Economists are anticipating a 3 per cent plunge in GDP in the September quarter, given there’s little immediate hope of an easing in restrictions in our two engine-room states and the ACT. There will be knock-on effects to Covid-free oases.

Josh Frydenberg knows ugly numbers are in transit heading into an election year, as lockdowns shrink the economy by $2bn a week, with a mounting bill of tax-free disaster payments, JobSeeker transfers, and crisis support for afflicted companies.