Oh boy. Did we expect to see this so soon? October is here and Australian jobs are evaporating like a shallow puddle in the sunshine.
The number of payroll jobs went down by 0.7 per cent in just one week, between September 26 and October 3. That is significant because this week is the first week where the official statistics would be able to capture the effect of the new JobKeeper system.
If you remember, not only is JobKeeper lower now, it's harder for businesses to qualify. That means a lot of businesses got cut off and support for their employees is now gone.
This next graph shows what I'm talking about. After a period of stability the jobs index is going down again and dragging wages with it.
This is happening as Victoria fixes its virus situation. It's not the first time the series has fallen, but earlier falls are mostly related to the virus getting worse. This time what's worsened is the amount of government support.
This is preliminary data from the Australian Bureau of Statistics based on businesses that report their payroll directly to the tax office. It reveals the biggest fall in jobs was among small businesses. Those are the ones who are most likely to have qualified for JobKeeper.
The government support for the economy had to be removed at some point, but doing it now might well strike you as a bit too soon.
The fall in jobs is not just about the virus. It wasn't just Victorian jobs disappearing. Everywhere you look, employment got worse, Bondi to Bunbury.
THE FLOW-ON EFFECTS
Christmas shopping season is approaching and retailers will be hoping we let loose a little after a year of restrictions. While the supermarkets and JB Hi-Fi have made out like bandits in 2020, many smaller retailers are on the brink of disaster. They need a strong Christmas period to survive to 2021.
Will Aussies spend up?
The RBA hopes so. They've been tracking what happened to all the money that got pumped into the economy over the last six months, and they've found that not all of it got spent. Aussies have been doing a lot of saving. What that could mean is that we are ready to unleash hell at Christmas time. A tidal wave of spending where we try to make up for all the good times we've missed during the year.
The RBA Governor puts it like this: "It is entirely possible that as restrictions ease, people will choose to draw on their accumulated buffers to sustain and increase their spending."
And sure, that's possible. A huge summer of buying presents for loved ones you haven't seen all year, beach holidays, meals out in the sun. A blowout. A massive splurge.
But what's also possible is families fear the creeping tide of unemployment and react with fear and timidity. That's not what we want to see. We want both sides to come to the party at once - we want employers to keep their staff on because people are spending, and we want people to spend because they know they can keep their jobs.
The great thing about JobKeeper was that it compensated for the lack of confidence that would have naturally existed, and glued the economy together.
But with the unemployment rate forecast to steadily increase until December and JobKeeper turning into a distant memory for many businesses, a lack of confidence in the economy could cause the decline on jobs to turn into a spiral.
Originally published as Disaster as Aussie jobs 'evaporate'