AUSTRALIANS are dropping out of the workforce at unprecedented rates. Since the end of 2010, Bureau of Statistics figures show, two-thirds of the growth in the adult population has been among people who are neither employed nor unemployed, just sitting on the sidelines.
New jobs figures yesterday show that in the past 18 months, the adult population grew by 341,000. But on the bureau's preferred trend measure, only 104,000 jobs were created and only 14,000 more people became unemployed.
Rather, 222,000 people joined the sidelines: neither in work nor looking for it. Most are male. Most live in New South Wales, Queensland or Victoria.
Some are older people moving into retirement. Some are students who in better times might have sought a part-time job. But most appear to be people of mainstream working age.
Yesterday's jobs figures delivered a correction after three months of solid jobs growth. In seasonally adjusted terms, the Bureau of Statistics estimates that Australia lost 27,000 jobs in June, wiping out the gains of May.
Most of the jobs lost were in NSW (down 14,600) and Queensland (10,400). But every state except Western Australia lost ground, and seasonally adjusted unemployment rose from 5.1 to 5.2 per cent.
Share prices and the Australian dollar slumped on the news. Financial markets now see an odds-on chance of another interest rate cut in August, with the Reserve Bank moving to stimulate growth.
The bureau's trend figures, which smooth out the zigs and zags in the data, show jobs are still growing, but slowly. In trend terms, jobs have grown by 12,500 a month since March almost all in part-time work with unemployment steady at 5.1 per cent.
The figures show a startling gap between WA and all other states. On the trend figures, unemployment in WA shrank to 3.7 per cent in June, the lowest rate since the start of 2009. But the next best state is NSW, where unemployment is 5 per cent.
Trend unemployment in June was steady at 5.5 per cent in Victoria, 5.4 per cent in Queensland and 7.3 per cent in Tasmania. The slump has been mostly in South Australia, where it climbed from 5.2 to 5.7 per cent in the past four months.
But unemployment in the eastern states would be well over 6 per cent if not for the 222,000 who have quit the workforce.
In NSW, 90 per cent of all growth in the adult population is among people outside the workforce: 76,000 out of 84,000.
In Victoria, roughly half the population growth has been among workforce dropouts. In Queensland and Tasmania, it has been more than 100 per cent.
The bureau also reports a stunning fall in hours worked, which slumped to their lowest level since January. The figures suggest many workplaces are pressing their workers to take leave or reduce hours, rather than reduce staff.