Is the economy already getting better? Let’s look at the data

Could RBA Governor Philip Lowe be right? Is the economy getting better faster than we dared hope?

Last week the man in charge of Australia’s monetary policy stuck his neck out and dared say what few others have said so far: things might not be as bad as all that.

“It is possible that the depth of the downturn will be less than earlier expected,” Lowe said in his monthly note accompanying the monetary policy decision. Yes, unemployment is up. But other important indicators are looking less grim.

Hours worked are improving, for example. Some forms of consumer spending are also recovering — clothing spending is back and, as restaurants open, spending in the hospitality sector should bounce back too.

Earlier in the crisis, the RBA put together three scenarios for the economic trajectory: a baseline scenario, an upside scenario and a downside scenario. The good news is we seem to be closer to the upside scenario than the downside scenario.

“The outlook is incredibly uncertain, but things have tracked fractionally better than the baseline,” Lowe said last week.

This is not to say that all is rosy. When the national accounts from the first three months of the year came in they confirmed Australia is having its first recession in decades. But even as that data arrived, more up-to-date information was on its way.

Full credit to the Australian Bureau of Statistics, who have turned things upside down to make sure timely and useful numbers are available in this difficult period. Their data show joblessness has gone up since early April — but only by 0.2%. Meanwhile, the share of people who have a job but no paid hours has fallen by 3.1%, as the next graph shows.

The economy went through a temporary phase when plenty of people still technically had jobs but were not getting hours. That peaked in early April. Despite the JobKeeper scheme, it now seems to be shaking out. Many people are returning to paid hours while others filter into joblessness. But overall, the deterioration appears to have been halted.

There is another data series that provides even more hope. This one is from the Department of Education, Skills and Employment. It turns out they’ve been asking a question the ABS hasn’t been asking: will businesses employ more people in the next little while?

The results are surprisingly hopeful, as the next graph shows. After a torrid period in March and April, the negative sentiment appears to have almost totally washed through. Things are back to being about as good as they were in late February. There are far more companies looking to hire staff than there are companies shedding staff.

This is excellent news for the many recipients of JobSeeker. All that seeking may not be in vain. It could — for some — end in a job.

So, what jobs are available in these challenging times? The top three are retail sales assistants, truck drivers and packers. This makes sense given the fact that the goods economy has been resilient.

The next two are receptionists and child carers. Those are the exact roles you’d expect to be hiring as the world abandons working from home and returns to the office.

How to find these jobs? Haunting the jobs websites is a good idea. That is the most popular way of finding staff. But, for better or worse, who you know still matters. The second-most popular method of hiring is word of mouth. Networks are a powerful way to get into a job.

That of course has great implications for people with strong networks, and terrible implications for those whose friends and family are themselves underemployed.