- While Australian businesses continue to reopen, their payrolls remain 5.7% below pre-virus levels, according to the latest ABS figures.
- Indicating a decline in the number of hours and jobs available, the overall recovery has been hampered by a second Victorian lockdown.
- Spending in the state once again turned negative up to 10 July, according to separate CBA data.
- Visit Business Insider Australia’s homepage for more stories.
Hopes of a slick V-shaped recovery in Australia seem like a pipe dream, as the reality proves to be a far lumpier affair.
Tuesday’s payroll data, a more timely business indicator than the official jobs figures, shows that the labour market is stuck in gear as employment stagnates.
Lifting 3.3% from its April low, payrolls had been growing until it hit a “surprising dip” in the last week of June, according to Indeed Asia-Pacific economist Callam Pickering.
“This dip should prove temporary, at least outside Victoria, with general labour market conditions improving as restrictions have been lifted,” Pickering said, attributing much of the fall to declines in the healthcare and social assistance sectors.
However, there is still a way to go. The hospitality, accommodation and the arts all saw the strongest resurgence but overall remain the worst-affected sectors, with work still not near pre-virus levels.
“The overall data paints a clear picture on an economy emerging from lockdown, particularly at the industry level, despite the decline towards the end of June,” Pickering said.
“However, the recovery will be gradual and there is huge uncertainty surrounding government policy, the global response, and most importantly Victoria.”
With a second lockdown now in effect there, and with the possibility of further spread to New South Wales, there are some big question marks over how the economy will track from here. In Victoria at least, the expectation remains the state economy will continue to deteriorate.
“Given level three restrictions are in place, we should expect employment trends to broadly replicate what we saw with the first lockdown,” Pickering said.
The country’s younger workers meanwhile are due to feel the impact of the recession more keenly, with youth unemployment to remain higher for longer.
Overall, the possibility of a second wave or wider lockdown will undercut the recovery effort.
While national spending shot back up to above-average levels with the lifting of restrictions, the Victorian experience once again shows there’s still a way to fall.
CBA card data shows the lockdown caused Victoria to diverge, with spending momentum turning negative over the first week of July.
Other states will now fear following it south.
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