Anyone wondering why the economy feels a bit soft at the moment need go no further than two sets of economic data released on Thursday.
One was the Westpac-Melbourne Institute Consumer unemployment expectations index.
This measure, based on the same survey that produces the higher-profile consumer sentiment index, shows fear of unemployment is unusually strong.
The index wobbles around from month to month but the trend measure, which smooths out the humps and hollows, is 23 per cent higher than its long-run average.
In fact at its current levels it’s higher than it was during the global recession and post-GST growth halt of 2000-2001, and not far below where it was during the worst days of the 1990s recession.
It’s well short of the highs seen right after the worst of the global crisis of 2008, but it’s been above normal for longer this time.
Clearly, the risk of losing, or not finding, a job is weighing on the minds of many people.
And, whether or not their jobs are secure, those in work face slower wages growth.
The Australian Bureau of Statistics (ABS) survey of average weekly earnings is only published six-monthly these days, rather than quarterly.
But it showed average weekly ordinary earnings for adult full-timers rose by 1.8 per cent in the six months to May, compared with a 3.5 per cent gain over the previous six months.
That would be consistent with a range of other indicators pointing to a soft labour market recently – falling levels of vacancies, slow employment growth and a slow rise in the index of average wage rates published by the bureau on Wednesday.
There are signs of a pickup in the number of hours worked, possibly a prelude to better times in the jobs market.
But, for now, workers are grappling with the after-effects of the recent bout of weakness, with their threat of joblessness and their promise of sluggish wages growth.
And, as retail sales figures have been confirming month after month, they’re being very cautious about spending.
Under the circumstances, that’s not the slightest bit surprising.
