Official Australian Bureau of Statistics (ABS) unemployment data showed unemployment surged to 6.4 per cent last month, a 12 year high. Private gauge unemployment surveys from Roy Morgan more accurately place unemployment at 12.2 per cent.
The loss of jobs is putting pressure on wages. In the last two quarters, according to the ABS, wage growth has failed to keep up with inflation – i.e. real wage growth is negative. Wage growth is now the worst in 17 years.
But the biggest concern is in the youth unemployment sector. A report from the Brotherhood of St Laurence released today show youth underemployment is now at levels not seen in 36 years and unemployment is at 13 year highs. It has many social ‘scientists’ warning we are creating an entire generation that will be jobless. Housing affordability will be the least of their concerns.
It’s no wonder Tony Abbott wants to cut this cohort loose to save his budget
Consumer confidence declined another 0.2% to 110.2 in the week ending 14 December, consolidating the 3.1% fall in the previous week.
• Deteriorating confidence in the economic outlook over the next year has driven the fall over the last fortnight with the sub-index down a cumulative 13.7%. This suggests the ‘sticker shock’ from the weak GDP print and the continuing negative news flow around the Federal budget is weighing on consumer confidence.
• ‘Household finances compared to a year ago’, the sub-index most correlated with household spending has been more stable.
Business confidence dropped sharply last month to the lowest level since mid-2013, prompting National Australia Bank to become the latest major forecaster to predict two official rate cuts in 2015.
NAB chief economist Alan Oster said the weak outlook for export prices and likely “more severe deterioration” in unemployment meant the Reserve Bank of Australia would cut the cash rate by a quarter-point in March and August. Rates will then be kept at a record-low 2 per cent until late 2016, he said.

Mr Oster also lowered his growth forecast for the economy, saying it will average 2.5 per cent in 2014-15, down from a previous outlook of 2.9 per cent. Unemployment is set to reach 6.75 per cent, rather than 6.5 per cent.
The revisions were driven by another slump in business sentiment, with NAB’s monthly index of confidence falling 4 points to 1 point, close to the level at which pessimists outnumber optimists.
The slump confounds claims in recent weeks by Treasurer Joe Hockey that business sentiment remains solid.
Mr Oster also lowered his growth forecast for the economy, saying it will average 2.5 per cent in 2014-15, down from a previous outlook of 2.9 per cent. Unemployment is set to reach 6.75 per cent, rather than 6.5 per cent.
were driven by another slump in business sentiment, with NAB’s monthly index of confidence falling 4 points to 1 point, close to the level at which pessimists outnumber optimists.
The slump confounds claims in recent weeks by Treasurer Joe Hockey that business sentiment remains solid.

The economic problems that Australia faces are the result of failure by of previous governments of all descriptions over the last 15 years or so, to understand what is going on and plan for the future.

The first problem which was not addressed is that all mining booms come to an end sooner or later, and it is a great mistake to base a countries economic future solely on mining revenue. A mining super profits tax should have been introduced, as soon as it became clear that a mining boom was in the offing, that is at the beginning of the Howard years. The generated revenue should have then used on productive infrastructure such as transport, eduction of skilled workers, and assisting industry where appropriate. The result of this failure has been to pump up the Aussie dollar way above any sensible value, and as a result it has become extremely difficult for Aussie manufacturing firms to compete either with imports or to export into international markets.

The next problem we have is the the present government is trying to use solutions for problems that occurred during the Regan and Thatcher years to solve present day problems, where they are totally inappropriate. The situation is very different today than during that period. Inflation is a non issue, union power has been reduced to acceptable levels, and income tax is no longer a burden on the economy.

The immediate problem is the fall in government revenue and the increasing burden of pensions, due to the aging population, this can only be solved by increasing taxation and reducing government spending. It is no longer a choice of either or it has to be both. It is also has to be accepted that government deficits will continue for some considerable time, but at least they are unlikely to lead to inflation in the medium to short term

Interesting discussion:
I notice that 579 has referred to high youth unemployment.
I see that in Spain & Portugal 18 to 25 year olds the rate is about 40%.
Some say it is higher, but whatever it is, it is a major problem.
What is now needed is a new way to employ younger people.
Work for the dole is an unconscious attempt to find a solution.
This will be one part of the new economy. China will continue to wind
down its economy so resources sales to there will never recover even
if it does fall to a baseline level.

We must look to ourselves for a living and forget international trade.
I did read that international cargo traffic has fallen considerably.
I have not been able to find official figures but it does seem likely.

We need to find a way to get young people interested in food production.
We need it to feed ourselves and we can make some extra by selling to the world.

As oil sales decrease Middle East countries that believe they can live
on that income will start lowering their living standard and like
Egypt will become very unstable. What political effect this will
have on the West is anybodies guess, but it might increase the belligerence
of Islamic terrorists. Income from the Jizah tax is declining as
they kill and exspell the Christians and others.

Those countries may become so weak that we can ignore them and get on
with learning how to manage our own countries without the need of
large amounts of oil.

I do not see how we can support large numbers of people
who do not work at supporting themselves.
Work for the dole seems the wrong concept.
We need a work for food concept.
That work needs to feed others such as the aged, children and
the disabled. We do that via taxation and one way or another that is
what we will still need.
We need to construct a new system as the Transition Movement has
indicated and is groping its way towards that objective.

A new article on Resilience website is by an Italian professor saying
much of what I have posting here.
You might be interested to see a somewhat similar opinion.

http://www.resilience.org/stories/2014-12-22/review-the-great-transition-the-end-of-growth

To manage this transition will need close co-operation between
political, technical science and the financial system which will face
a challenge that will need a complete reeducation.

A kicked-over trolley in a puddle of blood: that is the image stamped on the front of the new marketing guide Buyer's remorse: why anti-brand values are killing consumerism. The guide's thrust is simple - kiss the shop-till-you-drop age of conspicuous consumption goodbye.
Greet the dawn of the "post-consumer" - a virtuous entity "more conscious of community rather than status, value instead of indulgence, and basic needs not bling," writes the guide's trendspotter author Alan Fairnington. In Fairnington's view, in response to the rise of ethical consumption, firms can and must raise their horizons: adapt or die - of shame, perhaps.
Open consumption has become embarrassing, according to analyst Scott Goodson in a July 2009 Business Week confession that he shops online when nobody is watching. Underlining Goodson's misgivings, a PricewaterhouseCoopers report released in March this year stated that "rampant and excessive consumption" is waning.
During the recovery, a business' success will depend on recognising that shoppers remain in recession mode, the report said. Quelling impulse, shoppers will spend with deliberation and purpose, it added.
According to Fairnington, the purposeful shopper will shun designer goods because of their cost and questionable class. Cheap goods will be shunned too if their price is kept low through sweatshop exploitation, Fairnington claims, painting the community-conscious shifts in spending as overdue and enlightened.