Job vacancies have grown by additional 3.4% as revealed in jobs data released by the Australian Bureau of Statistics today.
As you can see below this is part of a 4 year trend:
Source: Australian Bureau of Statistics
Your first thought about this is likely positive.
Great, if there are vacancies, then unemployment will go down and GDP up.
Not so fast.
Devil in the Details: Why You Should Be Sceptical of Jobs Report
Previously, Markets and Money covered the illusion behind Australia’s GDP growth.
It is a similar story with job number releases.
With a bit of background, it is easier to get a real handle on the numbers.
It emerged two years ago that workers in Australia are increasingly unprepared for the work they need to do.
Australian Industry Group CEO Innes Willox said that there is a, ‘‘deepening concern about the level of foundation skills in the workforce and a continuing drag on the nation’s productivity.’
These comments came in the wake of an international report outlining the problem.
According to the report 44% of Australians have a literacy level below the standard required to succeed in a job.
With a lack of skills, these jobs will go unfilled and growth will slowly come to a halt.
Perhaps more importantly, the workforce participation rate hovers around 65%
This is a measure of how many people aged 16-64 are currently employed or seeking employment.
While Australia does relatively well in this department compared to other countries, it still lags behind major economies like the UK and France, even tiny New Zealand.
If you are only using less two thirds of your workforce, it is hard to see where the future growth will come from.
An economic downturn could happen, the vacancies will dry up and then unemployment will skyrocket as people who didn’t think they needed a job, suddenly realise they do.
Investors would be wise to proceed with caution.
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PS: If you want to protect your family wealth, you need to know why this financial expert is predicting economic collapse. Find out more here.