A glimmer of light for the jobs market with signs of a small improvement from the payrolls data tracked by the Australian Bureau of Statistics (ABS) in early May.
The ABS said yesterday that based on payroll information directly from millions of the nation’s businesses via the Tax Office, job numbers had fallen by 7.3% since the middle of March.
This was up slightly better than the original fall of 7.5% reported earlier this month.
Wages paid were now down by 5.4%, compared to an 8.2% fall in its previous report.
At the industry level, there had been a 27.1 drop in jobs reported across the accommodation and food sector, better than the 33% fall reported previously.
The ABS’s Head of Labour Statistics, Bjorn Jarvis, said in Tuesday’s statement: “The latest data shows a further slowing in the fall in COVID-19 job losses between mid-April and early May.”
“The largest net job losses over the seven weeks of the COVID-19 period, in percentage terms, were in Victoria and New South Wales, where the falls in payroll jobs were around 8.4 percent and 7.7 percent.”
“Payroll jobs worked by people under 20 continued to show the largest falls (-14.6 percent), and were particularly high in some states and territories, such as the Australian Capital Territory (-19.2 percent).”
“The week-to-week changes are much smaller than they were early in the COVID-19 period. The decrease in the number of jobs in the week ending 2 May was 1.1 percent, which was only slightly larger than the 0.9 percent increase in the week ending 25 April,” Mr. Jarvis said.
The JobKeeper scheme seems to be having a positive impact as does some early re-opening of some businesses such as cafes.
The ABS meanwhile says the JobKeeper scheme payments will be included in the national accounts which will mean GDP figures for the June and September quarters (at least) will be better than previously expected.
In a statement issued on Monday, the Bureau said (https://www.abs.gov.au/ausstats/abs@.nsf/mf/5261.0?OpenDocument) $130 billion of JobKeeper payments will “be classified as an ‘other subsidies on production’ paid from government to eligible employers” while employees whose employers are receiving the JobKeeper payment will be classified as employed and in receipt of a wage.”
That will impact a key measure in the national accounts (from which GDP data is drawn) called the COE (Compensation of Employees).
“Employers in receipt of JobKeeper will be receiving an ‘other subsidy on production’. This will be passed onto eligible employees as a salary or wage,” the ABS explained.
“Salaries or wages will continue to be classified as either compensation of employees or gross mixed income for e.g. self-employed persons. These payments demonstrate a formal job attachment<“ The bureau said.
In contrast, the ABS said that social benefits are ‘received by household intended to provide for the needs that arise from certain events or circumstances’, for example, sickness, unemployment, retirement, housing, education or family circumstances. Social benefits may be provided under social insurance schemes or by social assistance.”
Welfare payments such as JobSeeker are therefore not included in the national accounts because they are not associated with any productive activity.
This classification – which follows international rules for national accounts and statistics, will also impact the government finance statistics issued each quarter.