The Australian Bureau of Statistics has just released the December employment report, which was a terrible number no matter which way you cut it.
Employment in Australia fell by 22,600. But the huge fall in full-time unemployment of 31,600 is the big shock for markets, and puts a big question mark on the recovery at the moment.
But it is the contracting participation rate (think people in the workforce or actively looking for jobs) which is really holding the unemployment rate below 6%.
The ABS said that seasonally adjusted, the participation rate fell 0.2% in December to 64.6. The employment-to-population ratio (which expresses the number of employed persons as a percentage of the civilian population aged 15 years and over) also fell 0.2 points seasonally adjusted to 60.8%.
However, confusing things is the fact that even though so many jobs were lost, aggregate monthly hours worked increased 0.6 million hours to 1,634 million hours. Implicitly, this means we are more productive.
On a state basis, Victoria was hit very hard, losing 12,600 jobs with a massive fall in full-time employment of 26,900.
This took the seasonally-adjusted Victorian unemployment rate up to 6.2% compared with 4.7% in Western Australia, 5.8% in New South Wales, 5.9% in Queensland with only South Australia (6.7%) and Tasmainia (7.7%) in worse shape.
Other non-employment indicators, are pointing to a pick up in the Australian economy over the months ahead. But the outlook is much more cloudy after these data.