Why we won’t know the full effect of COVID-19 on jobs in Australia for at least another month

COVID-19 has thrown a lot of people out of work. That much is obvious – just look at the Centrelink queues and the closed shopfronts on Australian streets. But we don’t yet know how many people have lost their jobs during this crisis.

The words and phrases that Australians search for on Google can provide up-to-date information about what is happening in the economy. RBA researchers have demonstrated that searches for unemployment-related search terms rise when unemployment goes up in Australia.

Searches for unemployment-related terms spiked in March 2020, as shown below. Most of these search terms recorded their largest-ever search volumes in March. There were about four times as many searches for words such as ‘Newstart’ and ‘Centrelink’ in March as there were in February.

Clearly, many Australians have been thrown out of work in the past month. But we should not expect to see the evidence of this in the March labour force figures, due to be released on Thursday (16 March) by the ABS. This is because a lot of the effects of COVID-19 on the labour market happened after the March survey was conducted.

The ABS conducted the survey between 8 and 21 March. As it does every month, the ABS asked about 66,000 people whether they had done paid work in the previous week – so in this case, from 1 to 15 March.

But – if we use Google Trends data as our guide – the labour market didn’t hit the wall until late March, after the ABS had finished collecting its data for the month. The number of Australians searching Google for the word ‘Centrelink’ was more or less in line with normal levels through March – until the 22nd, when searches shot sharply up, rising even further the following day. This reflects the timing of decisions by National Cabinet to impose stricter restrictions on a range of businesses, eventually requiring that pubs and cafes cease allowing customers to dine or drink on the premises.

The March labour force data will report on a jobs market that sadly no longer exists – the Australia before widespread spatial distancing and shutdowns of non-essential businesses. It’s likely that the numbers will be worse than February’s – a range of disruptions were already in place, including travel restrictions that hit higher education, tourism, and other industries. But we will need to wait until the April figures before we start to see the full effect of COVID-19 on jobs in Australia.

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