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The economic impact of the COVID-19 crisis is starting to come through

- July 17, 2020 2 MIN READ

The economic impact of the COVID-19 crisis is starting to come through in the monthly numbers.

The latest were this week’s employment figures. 

– while the unemployment rate rose from 7.1 per cent to 7.4 per cent in June, it was the highest jobless rate in 21½ years (since November 1998).

– the good news was that employment rose by a record 210,800 jobs in June after falling by 264,100. Full-time jobs fell by 38,100 and but there was a surge in part-time jobs which rose by 249,000.

– online employment platform SEEK encouragingly reported that job advertisements lifted 41.5 per cent in June. Plus the Federal Government unveiled a $2 billion JobTrainer skills package to assist job seekers in returning to the workforce.

– most market experts are now predicting unemployment in Australia to peak around 8 per cent… which would be a sensational result compared to the rest of the world.

But remember these unemployment figures do not include anyone on JobKeeper payments as they are regarded as being technically employed.

The financial devastation from not opening up borders

This Coronavirus is so insidious and we must follow the advice of health officials. But there has to be a balance with the massive economic consequences. 

The latest unemployment figures are a stark reminder. Remember these aren’t just figures, they represent real people with real families whose income is severely impacted.

NSW 6.9 per cent (May 6.4 per cent);

Victoria 7.5 per cent (6.9 per cent); 

Queensland 7.7 per cent (7.8 per cent); 

South Australia 8.8 per cent (7.9 per cent); 

Western Australia 8.7 per cent (8.1 per cent); 

Tasmania 6.9 per cent (6.3 per cent); 

Northern Territory 5.7 per cent (7.4 per cent); 

ACT 5.1 per cent (4.1 per cent). 

The biggest job gains occurred in New South Wales (80,800); Queensland (52.900) and Victoria (29,500).

These figures are to the end of June. What it shows is that unemployment was lowest in the States which kept their borders and economies open (having said that the new Victorian lockdown won’t help that state in July).

South Australia and Western Australia have the most people unemployed and losing income.

It is such a fine balance between health and economic consequences.

China is leading the world out of the pandemic

As our politicians continue to annoy China, our biggest trading partner is leading the way out of the pandemic economic shambles.

The Chinese economy expanded by 11.5 per cent in the June quarter… well above the 9.6 per cent expected growth. GDP grew at a 3.2 per cent annual rate in the year to June (2.4 per cent was expected), following a 6.8 per cent contraction in the year to March.

How’s this for a figure I came across during the week. In June Australia exported 50 million tonnes of iron ore mainly to China… 50 million. Wow. 

Now multiply this by an iron ore price of $100 a tonne… $5 billion in a month. 

You can now see why the share prices of our iron ore miners are at record levels… and why Federal Treasurer Josh Frydenberg is counting his lucky stars because these exports will do wonder for his Federal Budget.