Do people realise how good they have it?
How hot do you reckon the jobs market is actually going to get? I’m starting to wonder.
Already we’re pushing towards one of the lowest unemployment rates in recent memory. Last week’s jobs data showed the unemployment rate dropping to a flat and neat 4.0%, after a very healthy 77,000 people found jobs.
The underutilisation rate – which some say gives a more realistic picture of the labour market has also dropped markedly as well, so there’s no denying that the labour market is going great guns right now.
And of course, that’s the national story. Some regions are pushing towards 2% unemployment, which is incredibly tight.
The gains in jobs have also largely been in full-time jobs too. Full time employment is up 4.0% since the pandemic began, vs just a 0.4% rise in part-time employment.
That’s amazing.
Another interesting feature of the jobs boom is just how many people have been pulled back into the labour force. Both the labour force participation rate and the employment to population ratio are at record highs right now. The RBA was keen to point out last week that that is very different from the experience in the UK and the US, where participation fell and stayed down.
And when you break that down by gender, you can see that see that the boom in labour force participation has been driven by the ladies. Male participation is about where it was pre-pandemic, where has female participation has increased markedly.
Women account for 65% of the 377,000 jobs created over the course of the pandemic.
But this is all backwards looking.
The interesting question is where do we go from here?
And that’s when my mind really starts to boggle.
Because the number of advertised job vacancies is through the roof right now. It’s more than doubled. Prior to the pandemic, job vacancies hovered around 1.5% of the labour force. Right now, they’re at 2.9%.
Boing. Look at it go. Right through the roof.
So you have an unemployment rate already approaching historic lows. And then you have a massive surge in the number of job ads.
From a worker’s perspective, I think this has to be the best job market I’ve seen in my lifetime.
You’ve got your pick of jobs. You can afford to be fussy because there’s heaps of work out there…
And sooner or later, that has to start translating into meaningful wage gains as well.
At some point households are going to wake-up to the fact that the pandemic is over, they’re sitting on a mountain of cash in household savings, and they’re living through one of the hottest job markets in history.
Sooner or later, they’re going to realise that things are pretty sweet.
JG.