Secondary jobs bear brunt of job losses
Payrolls & wages; Preliminary trade
Survey of payrolls & wages: The Australian Bureau of Statistics (ABS) reported that between the week ending March 14, 2020 and the week ending August 8, 2020, employee jobs decreased by 4.9 per cent and total wages decreased by 6.2 per cent. Jobs fell most in Victoria (-7.8 per cent) across states and territories.
Preliminary foreign trade: In the year to July the trade surplus was $77.2 billion, down from the record high of $87 billion set in the year to May.
The payroll and wage data helps government with decisions on assistance measures for households and businesses. The trade data gives guidance on future spending (imports) and industry income/profitability (exports).
What does it all mean?
• The bad news is that there hasn’t been much signs of improvement in the job market in the past few weeks. But the good news is that it appears that JobKeeper has been successful in protecting the main job of Aussie workers. The Statistician estimates that secondary jobs account for around 30 per cent of all payroll jobs lost between the week ending 14 March 2020 and 8 August 2020.
• Some have worked a second job out of necessity, others by choice. But data showing that main jobs have been protected accords with the fact that retail spending has remained firm. The absence of income from second jobs may also explain the high take up in early release payments of superannuation.
• The trade surplus appears to have peaked for now. Over the past four months, the rolling annual total of exports has eased 4 per cent – twice the drop of imports. But much can change in the fluky winds of statistics. Recent records for iron ore shipments aren’t fully reflected in the data. Same for gold. While imports of cars and oil are lifting from a low base. And imports were also supported in July by “commodities associated with personal protective equipment (PPE), including face masks.”
What do the reports and figures show?
Payroll and wages
• The Australian Bureau of Statistics (ABS) has released the ninth edition of a new survey: “Weekly Payroll Jobs and Wages in Australia”.
• The ABS reported:
“Payroll jobs fell by 1.0 per cent over the month to 8 August.”
“Over the month to 8 August, payroll jobs fell by 2.8 per cent in Victoria. Some of the initial impacts from the Stage 4 restrictions, are shown in the latest weekly data as they came into effect.”
“Nationally, payroll jobs at 8 August were around 4.9 per cent below mid-March, when Australia recorded its 100th confirmed COVID-19 case. The latest data showed that after an initial period of recovery between mid-April and mid-June, payroll jobs losses had remained between 4 and 5 per cent below mid-March.”
“By 8 August, around 43 per cent of payroll jobs lost across Australia by mid-April had been recovered.”
• Between the week ending March 14, 2020 (the week Australia recorded its 100th confirmed COVID-19 case) and the week ending August 8, 2020:
“Employee jobs decreased by 4.9 per cent; and
Total wages paid decreased by 6.2 per cent.”
• Across states and territories from March 14 to August 8, employment changes were: NSW (-4.4 per cent); Victoria (-7.8 per cent); Queensland (-3.7 per cent); South Australia (-3.8 per cent); Western Australia (-2.0 per cent); Tasmania (-5.0 per cent); Northern Territory (-2.6 per cent); and the ACT (-5.5 per cent).
• By industry, employee jobs fell most from March 14 to August 8 in Accommodation & food services (down 18 per cent) from Arts & recreation services (down 15.3 per cent). In the Electricity, gas, water & waste services sector jobs rose 3.3 per cent. Jobs also rose 1.8 per cent in Public administration and safety and rose 0.6 per cent in the Financial and insurance services sector.
• Interestingly, wages fell most between March 14 and August 8 in Mining (-21.2 per cent), followed by Accommodation & food services (down 12.7 per cent).
• Over the period March 14 and August 8, jobs fell similarly for males (-5.3 per cent) and females (-4.7 per cent). And wages fell more for males (-8.7 per cent) than females (-2.7 per cent).
• The ABS also reported for the period March 14 to August 8:
Payroll jobs: Jobs worked by people aged 70 and over decreased by 11.5 per cent and those worked by people aged 20-29 decreased by 7.2 per cent;
Total wages: Payments to people aged under 20 increased by 19.6 per cent. Conversely, payments to people aged 40-49 and 60-69 both decreased by 7.8 per cent.
Payroll jobs considered main jobs decreased by 3.6 per cent and secondary jobs decreased by 25.7 per cent.
Preliminary international trade – July
• According to the Bureau of Statistics (ABS), in original terms, the value of exports of goods stood at $29.1 billion in July, down 6.3 per cent in the month. The value of exports are down 17.7 per cent from a year ago.
• The value of goods imported totalled $25.8 billion in July, up 10.6 per cent in the month but down 2.0 per cent on a year ago.
• In the year to June the goods trade surplus (exports less imports) was $77.2 billion, down from the record high of $87 billion in May.
According to the ABS:
• “The decline in July 2020 was driven by exports of metalliferous ores, down $1,500m (-12 per cent). This in turn was driven by declines in iron ore (lumps and fines), down $934m (-9 per cent) and copper, down $271m (-36 per cent) following record export values for both these commodities in June 2020.
• Other significant declines in July include: coal down $675m (-17 per cent); cereals, down $230m (-40 per cent) with large declines in wheat; and gas, down $229m (-8 per cent).
• These declines were partially offset by an increase in exports of non-monetary gold (excluding gold coin), up $1,261m (55 per cent) to $3,545m. While exports of non-monetary gold are volatile and large month-to-month movements are not uncommon, exports in 2020 have been particularly strong with record highs recorded in March and then July 2020. The high value exports of non-monetary gold in July 2020 were driven by exports to the United States of America, which was up $1,293m.
• Year-on-year, exports in July 2020 declined $6,239m (-18 per cent) compared to July 2019. This was driven by falls across major resource commodities including: coal, down $2,358m (-42 per cent); gas, down $1,648m (-39 per cent); and metalliferous ores, down $1,098m (-9 per cent). Year-on-year, exports of non-monetary gold were up $866m (32 per cent).”
According to the ABS:
• “The increase was partially driven by a large increase in imports of road vehicles, up $792m (49 per cent) following low import values in May and June 2020 at the height of Australia’s COVID-19 restrictions. Despite the large month-on-month increase, imports of road vehicles in July 2020 still remain low by historical standards, down $803m (-25 per cent) compared to July 2019.
• Other large increases occurred in imports of: transport equipment, up $492m (223 per cent) with the import of several aircraft; non-monetary gold, up $300m (37 per cent); and petroleum, up $244m (15 per cent).
• Similar to road vehicles, imports of petroleum continue to recover from the low import values recorded in May 2020 and June 2020, but remain low by historical standards, with July 2020 down $1,369m (-42 per cent) on July 2019.
• Imports of textile yarn, fabrics and related products also increased, up $166m (29 per cent) with July 2020 representing a record value for this series following three consecutive months of high values. Driving the increase are imports of commodities associated with personal protective equipment (PPE), including face masks.
• Year-on-year imports in July 2020 declined by $540m (-2 per cent) on July 2019 due largely to the significant declines in petroleum and road vehicles. In the same period imports of textile yarns, fabrics and related products have increased by $412m (127 per cent), while imports of transport equipment and non-monetary gold also increased year-on-year, up $400m (128 per cent) and $318m (40 per cent) respectively.”
What is the importance of the economic data?
• The ABS data Weekly payroll jobs and wages “provides indicative information on the economic impact of the COVID-19 coronavirus on employees, including changes in employee jobs, changes in total wages, and changes in average weekly wages per job.”
• The monthly International Trade in Goods and Services release from the Bureau of Statistics provides estimates on exports and imports of physical goods (such as coal, beef and computers) and services (such as travel receipts). The balance of goods and services (BOGS) is a narrower description of Australia’s external position than the current account estimates. The import data is a useful gauge of consumer and business spending while exports reflect global demand as well as domestic influences such as drought.
What are the implications for investors?
• The economy continues to hold up. The raft of support and stimulus measures are doing as designed. The other piece of good news today is that consumer confidence spiked higher in the last month. Employment and confidence are the two vital ingredients for longer-term economic recovery.
• Tomorrow, detailed payroll data will be released to highlight the impact of job losses in regional areas.
Published by Craig James, Chief Economist, CommSec