It’s a tricky path trying to steer between The prevailing greed and hysteria
THE latest Roy Morgan jobs numbers will show 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 1.42 million.
A further 1.33 million were under-employed, meaning a staggering total of more than 2.7 million Australians were either out of a job or working short hours. That’s almost 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.
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 started to bite. The Morgan numbers measure through the month.
The last ABS numbers had the jobless rate at only 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’s now 18.8 per cent in July.
More telling, it’s clearly become 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 southeast Queensland.
Right now almost threequarters of the 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.
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 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 that no one has started 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 had some very good jobs numbers – but they were on the other side of the Pacific.
Almost 1 million jobs were added in the US through July. That’s equivalent to about 80,000 in Australia.
These US jobs numbers are probably the single most important – and the most closely watched – in the world.
Why? Because the “smartest” (actually, the greediest if not also the dumbest) guys in the room” on Wall St 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 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 St is going to bend over itself to see anything as positive for shares. And what is positive for share prices on Wall St is positive for share prices everywhere.
But, that does mean they will necessarily be right.
time, the plunge on Wall St 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, you have to understand what those guys on Wall St and in state government offices are likely to do.
You are at the mercy of the greediest and the most hysterical people.