Employment weakened in final weeks of 2020

Employment weakened in the final weeks of 2020, but not before returning to pre-pandemic levels earlier in the December.

The Australian Bureau of Statistics said payroll jobs dropped 5.5 per cent in the fortnight to January 2, 2021 and were 6.1 per cent below mid-March, when the COVID-19 pandemic set in.

Head of ABS labour statistics Bjorn Jarvis said the latest data shows payroll jobs had increased back to the level of mid-March in early to Mid-December, coinciding with the seasonal peak for jobs each year.

“The data also shows the seasonal fall in payroll jobs later in December, following a similar seasonal pattern to last year, before the start of the pandemic,” Mr Jarvis said releasing the data on Tuesday.

The figures are part of a special series of reports there were introduced to provide a more frequent update on the state of the economy during the pandemic.

Labour force figures for the full month of December are due on Thursday.

Meanwhile, new homes sales almost doubled in December compared to November, up by a staggering 91.8 per cent, and the second strongest result in the 20-year history of the Housing Industry Association’s survey.

It was only exceeded by activity in March 2001.

“This surge in sales can be attributed to HomeBuilder as households finalised contracts to build a new home before the December 31, 2020 deadline to access the $25,000 grant,” HIA economist Angela Lillicrap said.

The grant has been extended to March, but at a reduced grant of $15,000.

Over the year new home sales increased by 32.5 per cent compared to 2019.

“This is an exceptional result given the nature of the pandemic and the effect that it has had on the broader economy,” Ms Lillicrap said.

The data follows a recent spate of upbeat figures for job vacancies, home lending and retail sales, suggesting the economic recovery is in full swing.

But this has failed to impress Australians with confidence slipping further in the past week.

The latest weekly ANZ-Roy Morgan consumer confidence index eased 0.2 per cent, its third consecutive fall.

Components of the index – a pointer to future household spending – proved a mixed bag, with confidence surrounding people’s current financial conditions sinking by three per cent.

The “time to buy a major household item” sub-index also dropped 2.4 per cent. 

But when respondents were asked about their future financial wellbeing, this sub-index improved 2.4 per cent and remained above the long-run average.

ANZ head of Australian economics David Plank noted overall confidence remains higher than a year earlier.

“The comparison reflects the impact of the bushfires in late 2019 and early 2020,” Mr Plank said releasing the index on Tuesday.

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