The jobs figures tell the story of what’s wrong with the economy

The jobs numbers project once again the exquisite failure of Australia’s population-led profitless economy.

Federal Treasurer Jim Chalmers.

The jobs numbers project once again the exquisite failure of Australia’s population-led profitless economy, which leaves most Australians feeling and actually being worse off.

While at the same time, the economy teeters ever closer to ‘the cliff’.

Both the jobless numbers and the number of those in jobs went up in July. The first by 24,000; the second by 58,000.

How is this possible? And what does it mean?

Normally, it’s one or the other.

If you have the jobless numbers going up, it’s because the economy is sliding towards or is in recession. You sure as hell don’t have people finding jobs.

Equally, if you did have people finding jobs, if businesses were adding to their workforces, in normal times you wouldn’t have people losing jobs.

So how do you get both, at the same time?

Something, we’ve never had before?

The answer is that it is all about this massive – 250,000 a-year – flood of migrants.

So yes, we have more people finding jobs; but we also have the number of those losing jobs rising.

From 3.7 per cent a year ago, to now 4.2 per cent.

The overall economy is sluggish – at best; but the sheer weight of all those extra people means the aggregate numbers remain positive.

So we are not in what is normally regarded as a recession.

We had - frankly pathetic, but nevertheless, still, just - positive growth in overall GDP.

0f 0.2 per cent in the last September quarter; of (whoopee!) 0.3 per cent in the December quarter; and a really quite miserable all of just 0.1 per cent in the March quarter.

You’d think that Treasurer Jim Chalmers would have enough self-respect to keep his head down on the days those pathetic numbers came out.

But in per capita terms - the only terms that matter to individual and indeed all 27m of us - we have been going backwards.

GDP per capita has fallen in every one of the last four quarters, dropping 1.3 per cent down over the year.

So yes, to coin a phrase, we have no recession.

But the average Australian has got continually poorer.

And in overall terms, the jobless rate – the bottom line that matters to real people - edges higher.

In its latest forecasts, the Reserve Bank had the jobless rate edging up to 4.3 per cent by the December quarter. It’s already got to 4.2 per cent, in July.

The other day I wrote how I could easily paint a scenario where the RBA delivered a ‘surprise’ rate cut – even though Governor Michele Bullock ruled out one this side of Christmas.

A rate cut even as early as September, but more obviously on Cup Day in early November.

My scenario was based on a jobless rate going to, say, 4.5 per cent, and - for a Cup Day cut - a benign September quarter inflation number.

I’m very sensitive to the beating that great swathes of small and medium-sized businesses are copping.

I think the economy remains right at the edge of the cliff; that the per capita recession could go very rapidly to a full-on recession.

Originally published as The jobs figures tell the story of what’s wrong with the economy