ANZ economists are tipping another rise in the rate of unemployment as the jobs market continues to lag behind in an economy otherwise now showing strong growth.
The latest ANZ Job Ads survey for June showed that during the month job advertising remained "tepid" with the sum of newspaper and internet ads unchanged on a seasonally-adjusted basis compared with May.
"Given that job ads lead changes in the unemployment rate, and the trend is fairly flat, the data suggest a risk of a near-term recoil in the unemployment rate from its sharp first-quarter fall," ANZ senior economist Sharon Zollner said.
She said the bank's "composite" weighted job ads series that combines internet and newspaper advertising had fallen 0.9% in June, on top of a 3.8% fall in May.
"The annual change in the 3-month average has started losing ground again, predicting that over the next six months we will see a small rise in the unemployment rate versus 12 months previous.
"Given the unemployment rate averaged a touch over 7% in the middle quarters of 2012, this would be consistent with a sharp recoil in the unemployment rate from the current 6.2% back up towards 7%."
Zollner said the fact that the recovery from recession "has been a slog" was underlined by the fact that internet job advertising remained 15% off its pre-recession peaks – and the economy had grown in the meantime.
"Newspaper job ads continue to lose market share, falling a further 2.5% in June on top of a hefty fall in May. Internet job advertising rose 0.5% in June, seasonally adjusted, but remains lower than two months ago (seasonally-adjusted)."
Official employment figures for the June quarter are set to be released on August 7.
Unemployment statistics have stubbornly lagged behind other economic data that are suggesting the country is now making a strong recovery from the post-global financial crisis recession.
As recently as the September quarter last year official unemployment, as measured by Statistics New Zealand's Household Labour Force Survey, was sitting at 7.3%, dropping to 6.9% in December (subsequently revised down to 6.8%) and then plunging to 6.2% for the March quarter.
"Despite strengthening confidence across the economy, the labour market continues to drag the chain in an otherwise increasingly broad-based economic expansion," Zollner said.
She sad the unchanged job ads total in June reflected a 0.5% monthly increase in internet ads, offset by a 2.5% fall in newspaper advertising.
"The level of internet ads is 3% higher than a year ago, thanks largely to strong gains in February and March (seasonally-adjusted), whereas newspaper advertising continues to lose market share."
The regional job ads numbers were volatile, she said.
"Job ad numbers in Canterbury eased again, despite a small bounce in newspaper advertising. Both types of job ads increased in Wellington, continuing the recovering from the early-2013 slump while in Auckland, newspaper ads fell sharply, but internet advertising continued its slow grind higher."
39 Comments
'Confidence' is 'data'. Increasing the value of existing houses is 'growth'. Whatever.
What was our energy consumption, yoy, efficiency-adjusted, David? Just like the China comment yesterday, that'll tell you whether we're actually 'growing'.
Try this;
While we may not have energy data to hand, we do have un-employment data which is luckluster. If we really had a real recovery why do we not see this dropping. Hmmm do we see any improvement in electrical use I wonder? if we see that recovery in increasing demand, well OK, otherwise I think its make believe.
Me thinks the banks are full of wishful thinkers....even if we are recovering if we do so without providing jobs that doesnt get us far....it just means the few % at the top gained while a few % or more at the bottom dropped out...so its a failure.
A confidence con indeed.
regards
Cheers - but don't be too hard on folk. It's outside the middle-class comfort zone, particularly if you're a parent.
But I have no sympathy for those who don't (or who pretend not to) understand the energy/money tie-up. Every economist in the country has had the opportunity to learn from this site, over the last few years; I'm yet to meet one who has ceased to sing from the Ministry of Disinformation song-sheet.
Go well
pdk,
The domestic economy can grow strongly without power usage going up. In fact many folk would be looking to buy a hybrid or similar fuel efficient cars and possibly installing solar panels if they had more available cash.
Energy prices and consumption are not the whole story much less the whole driver of economic growth. Economic growth drives power prices and consumption not the other way around. Aside from the odd bubble when speculators have gotten excited and sent prices rocketing, which hurts everyone, you will see it is oil prices that react to global growth data not the other way around. When growth data out of China or the US surprises the market you will always see a significant impact on oil prices.
The paradox of energy is much like "a minties moment" ...
When I was younger I used to enjoy a bag of minties .. would suck the first couple, then chew the next few, then crunch through the rest .. so enjoyable .. kept going until the bag was finished .. and they were all gone .. in 10 minutes .. then I tried "milkshake lollies" .. not as sweet .. until I broke a few teeth and had to get crowns .. then I stopped .. now got a mouthful of crowns ..
It's human behaviour .. people have to believe tomorrow will come .. and until tomorrow comes and the "oil" is all gone no one is going to behave differently .. they will use it faster .. and more of it .. until the cost becomes so expensive you turn to alternatives .. which may have undesirable side effects .. then one day you will look back and say maybe we should have been smarter, earlier ..
Sigh - how many years have I been trying here?
Money - you mentioned cash - is a proxy. No more, no less. Sure, in a bidding-war, the 'price' of something may go 'up".
But the only underwriters of cash, are the goods/services on offer. New ones must represent energy having been used. Any other extra proxy yoy must represent the increase in 'valuation' of something existing (like a 50-year-old house). Upping the value of existing stuff is a zero-sum game, in physical terms. You may have 100,000 more proxy-notes in your hand, but there are no more goods/services available for sale or existing, than there were before. (the fact that the concurrently-increasing energy-supply produced more items to 'buy' for a while, temporarily providing a home for the 'new' money, seems to be a hard point to grasp for many).
Thaty leaves new goods/services, and - efficiencies aside - the supply of same will track the energy used in their proffering. That means that the real ability to pay for anything, is energy-supply related, that what isn't is a bubble, and that if said bubble doesn't get inflated away, it'll burst. No third option.
Yes, there's speculation magnifying any trend. Just remember this is a global, inclusive vacuum-cleaner. Just because one player emerges intact, doesn't mean that their activity was energy-supported. A bank, for instance, can't be supported post peak global energy flow. They will continue to exist, and charge, though, which means that someone somewhere further down the feeding chain is going to be sucked dry.
Let’s say I'm buying a small new car, 25k and I will buy a standard make and model, 35k and I would consider a fuel efficient hybrid. Let’s say I'm building a new home 300k and I will build a standard family home, 400k and I will invest in solar, wet backed fire place and other green energy saving features.
Perhaps I'm not "normal" but in each case there are new goods and services on offer and less energy being used. The stats would show I am consuming less energy and you would assume I'm economically worse off when in fact I am better off. Technology not only generates more goods and services on offer but also more jobs and often less energy consumption...
Julz @2.31
He's right, and you don't get it ......yet.....
Not 'equivalent', but it must be compared. At the end of the day, everything is a matter of Energy Return, vs Energy Invested. If a solar panel returns less energy over it's lifetime than it took to build, then it's never worth doing, at any price. It's a net energy loss. So too, if a barrel of oil takes more than a BOE (barrel of oil equivalent) to raise, process and proffer, it'll never be done. at any price.
If you end up with less energy that you started with, you just don't do it. I lecture using the example of a wolf chasing a rabbit. If the energy taken doing the chasing was more that the eating of the rabbit returned, the wold dies. There can be a thousand rabbits and a thousand chases (actually he won't last that long :) the wolf dies. The wolf can be a billionaire, the wolf dies.
That train which ran away and exploded, is an example. It's taking Bakken shale oil, 3,200 km (yes, you read right) to a refinery because the demand for a closer refinery and/or a pipeline, will be too short time-wise to guarantee payback. The way they're transporting it is marginal EROEI - and that's there we're at globally, in a 'recession', at the margin. Imagine the margin :) if we try and pick up the pace? The conundrum is that to attempt to do the 'more', well be forced to use the 'less and lessening' EROEI sources, sequentially. Which delivers less work, which........ get it?
ps - there's a tragedy of the commons reason why I'd get my hands on a solar panel which never returned it's build energy - because I see it as storing oil (used in it's production) in a form which will give me energy long after the pumps stop pumping.
I'm not sure we are dissagreeing, my point was simply that technology can produce more goods and services while at the same time reducing our oil consumption. If I make a wind farm, hydro power plant or buy a solar panel I will produce vastly more energy than the oil equivalents that went into making it.
The technology has created jobs, income and economic growth and also reduced the amount of oil used (even when build energy is included). This is why I see your focus on oil as being too simplistic.
That's worth further engagement :) (and I've pruned the fruit-trees, my day's task...)
You may produce more energy, over time, from wind and hydro, and indeed, I champion renewables; they're what we will end up with anyway. But don't expect to do as much work as a compact tank-ful of oil does for you. The Enery Return just isn't there. First-generation biofuels, for instance, were a net loss:
http://www.azimuthproject.org/azimuth/show/Energy+return+on+energy+invested
You say (I call it 'glib', with respect) "jobs, income and economic growth'.
Have a wee think: a job is labour - which is work, just much less efficient (worse EROEI) than oil.
Income is a pile of proxy, which presumes there will be something to buy (you still overlook that tie-up).
And 'economic growth'? You don't state 'all other things being equal', but I presume you imply it? If you're replacing oil with wind/hydro, all things (the total amount of work do-able, in other words) are not equal.
I like the days task, sounds like a very low oil consumption task :)
Yes oil is, or at least has been the most efficient for its price, to me efficiency is less important than job and income generation though. Yes new technology may require more support and more labor to produce things than pumping oil from the ground, but creating extra jobs is more beneficial to the economy as a whole.
If we only measure efficiency in terms of producing things for ever decreasing hours of labor many of us will be out of work. The lucky few who do have work are actually not so lucky for the following reasons.
- There will be ever increasing competition for his job which will push his wages down
- He will be paying ever greater taxes supporting the increasing unemployed population
- There will be many more disgruntled members of society who will tie up yet more income in the form of police, courts and prison
Jobs are only labour, and not very efficient 9we only took off when we applied fossil fuels to work)
where does it go?
http://www.jacksonharper.org/?p=62
there but for a different place in the queue..............
Yep, I am not sure if I posted on that yet but a quick look around and you find that Egypt is in deep do do in the energy department. The exports of oil allowed the population to expand the population beyond the ability of the land to carry through importing food. The are borrowing money to buy food with no way of paying back the creditor, what happens when the creditor turns of the switch? Which it will. Ditto New Zealand where we import half our energy needs, although even in that scenario we are lucky enough that we will likely have a surplus.
I have been saying to friends that Egypt will never become peaceful and settled in our lifetime. What is being portrayed in the media as a political problem is actually a resource problem.
When you talk about growth thats making a good, or more of them, hence the energy use grows as more units are made. That has an offset sure, but the payback is say 10 years, therefore the offset is 10% per annum and not 100%.
Of course tahts only for solar cells, buy a new iphone and there is no offset, as indeed it is with most items.
regards
Even the cell phones and other consumables are continually being made in more energy efficient ways though.
I could buy an electric car and power it from solar panels on my roof now. Apart from the build energy I could have no reliance on oil at all to meet my transport needs. That’s what technology brings…
You are still confusing the energy required to build something now vs the energy it will save over its lifetime. Building a solar paney now doesn't save you any energy, it expends it, same with your hybrid car especially if comparing to maintiaining your old one a bit longer. Yes we should work towards greater efficiency but it is no panacea. Technology and efficiency also brings you Jevons paradox.....
That depends, if I already needed a car buying an electric one needn't cost much more energy to make. If I already need a roof using solar roofing tiles needn't cost much more to make either. I do appreciate most of the gain comes over time but unless you are expecting the end of the world to occur in the next few years that is still ok.
Julz - you have to expect the end of growth-based finance, before 2020. It's on life-support now, most interest-rate bases are at or near zero. It might have been able to survive peak energy available per day, if it hadn't been so leveraged; but even at zero interest rates, the principal alone can't be repaid by meaningful work being done. Inflation or default, or a combo, have to happen.
Same reason we'll never sequester carbon, by the way. There will never be the margin, from here on. Rudd has just chosen 85% coal-fired electricity because there is not enough excess energy left over to do the work needed, as even as there isn't enough to fuel 'growth'.
to Julz @1.57
You must have been 'econonics' trained? There was a time when most Europeans believed that there was a home for little children, above the bright blue sky, and damnation somewhere below. They don't - unless they're at the slow-to-grasp end - any more.
Your failure - and I tried to point it out - is to still transfer the 'value' to the proxy. You haven't mentioned whether you have the cash in hand, or expect to do work (providing goods/services using energy) in the future to 'repay'. If the latter is the case, where's the guarantee? And globally, what does your particular pile of 'cash' represent? Did you spring a mortgage against an increased valuation? Then it represents nothing, and someone else has to dip out in the bidding.
Techology, in energy terms, only makes the use of it more efficient. That's a 'diminishing returns' thing, can't be anything else. Which is why 'growth' in productivity (which is a reduction in energy per output, including labour, when you get down to it) has slowed, and will effectively cease at some point.
It's a bootstrap problem. Most folk transfer the 'value of the moment' to the proxy, then somehow think that if they had 'more', they'll always be able to buy 'more'. Finite planet: had to fall over at some point, did that. Not at the end (run-out) but beyond peak flow. Interesting times, and I comment on this site because interest is one of the things that can't continue (without triage-displacing something else, at least....).
I'm not sure that there are fewer Europeans who believe that today or that the intellect of those that do is less than those who don't. Anyway the point I was making was that if I was to earn more it would be spent on an initially more expensive car and home that would save me money (and energy) in the longer term. I will have reduced the impact on the planet and delayed the point at which we run out of oil, technology does allow us to have more and use less power.
It is not always a simple case of being more efficient either, some technology completely removes the need to tap into the energy markets and some are net producers of energy.
Earn more. From doing what, to what? Is the EROEI on your work in positive territory? That has to be counted, you know.
Yes, efficiencies are great, They're what I'm about (my better half might say otherwise!) but they don't produce energy (which one 'removes the need'?), and they follow a path of diminishing returns.
Its known as the futures market....when they are surprised on better growth predictions/results, speculators buy futures and drive up prices, when its worse then sell out and prices drop.
In terms of a domestic economy growing without energy use going up, uh no, not if a real actual good is produced, little if anything does not use more energy if more items are produced...
regards
Julz, you have contradicted yourself. Whenever the growth data surprises the market the oil prices go up and supress the growth. Like a saw tooth or rachet. Each time the low in the oil price is higher than the previous low - on average. So the new oil price kills the green shoots.
Who said markets are efficient?
Besides that if supply is constrained (and it is), therefore there is an opportunity for futures traders to bid up future oil delivery prices, which they do, if they think demand will increase....however there is also the issue many issed of ppl being unable to pay so not buying at all. Hence markets are not rational...individuals maybe, but not markets.
regards
I don't know if my local rag is a good barometer of jobs given the change to internet advertising, but it is grim.
14 years ago when I first moved into the district it was recession time still and there was only ever half a page of jobs and a lot of those part time or low wage. In the mid 00's when things were booming the jobs section would at times extend to six pages. Part of this effect was the shortage in the main centre and employers were trying to extend their reach and pick up applicants on the fringes.
Lately however it is back to the dismal level it was prior to 2000, perhaps worse.
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