Thursday, January 16, 2014
The number of employed in Australia rose 0.5% in the year to December, the lowest gain in several years. Still, it was a gain, so that still means progress, right? Wrong! Australia's population is growing at a rate of 2% per year, mainly due to a high level of immigration. Given this, a 0.5% increase in the number of employed implies a 1.5% drop in the employment rate. And indeed, the same report shows that the unemployment rate rose 0.5 percentage points, even as the participation rate fell 1%. In population adjusted terms, it thus seems clear that Australia is in a recession.