Thursday, 7 May 2009

Annette Beacher is in shock

"I'm in shock," said TD Securities senior strategist Annette Beacher just after 11.30am this morning. The Australian Bureau of Statistics March figures showing employment up and unemployment down were not what she and other economic analysts expected. "There's absolutely no economic justification for a bounce in employment. I'm just ploughing through the ABS report to see if there's a new standard error, but I can't see anything so I'll have to treat the data with scepticism," Ms Beacher was quoted  by Business Spectator as saying. "Given unemployment is expected to rise in the current environment as growth is slowing, this could be an outlier."
Or it could be just another example of how pointless it is to take any notice whatsoever of what Ms Beacher and her ilk keep predicting. Yesterday the panel of economists paid extravagant sums by financial institutions were way out in their forecasts of what the retail sales figures would show (see The so called experts wrong again ). This is how Reuters reported the predictions of its panel before today's employment numbers came out:

And here is the Reuters summary of the actual numbers:

What the ABS reported was that seasonally adjusted employment increased in March by 27,300 to 10,798,900 with full-time employment up 49,100 to 7,672,700 and part-time employment down by 21,800 to 3,126,200. Unemployment decreased by 35,300 to 614,600. The number of persons looking for full-time work decreased by 17,800 to 443,500 and the number of persons looking for part-time work decreased by 17,400 to 171,100. The participation rate fell by 0.1 percentage points with the result being unemployment decreased by 0.3 percentage points to 5.4%. The male unemployment rate decreased by 0.2 percentage points to 5.5%, and the female unemployment rate decreased by 0.4 percentage points to 5.3%.

Now if you are still interested in the predictions of economic experts let's conclude with Ms Beacher's confident assertion that the data did not alter her fundamental view of the eocnomy. She still expects interest rates to bottom at two per cent and gross domestic product (GDP) to fall by 0.7 per cent in the March quarter.

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