NOW LOOK HERE, boss, I do not make a practice of picking on our own front page even if I am now doing it twice in a row but this one I cannot let go. In our top story on unemployment and bankruptcies yesterday the third paragraph stated: 'Analysts - pointing to worsening personal bankruptcies which last month hit another record - warned the small decline in the jobless rate did not signal a return to high employment levels.' Wrong prognosis on both counts, I'm afraid. Let's start by looking at that figure of 2,580 bankruptcy orders last month. It is a record but the Official Receiver's Office also publishes the number of bankruptcy petitions each month and these constitute a good leading indicator of the trend in court orders of bankruptcy. The red line in the first chart shows you the monthly tally of bankruptcy orders over the past four years and the blue line (sorry about the jumble) shows you the petitions received after I have moved these figures three months over to the right to account for the approximate delay between petition and order. The jumble tells you how closely the two are related and the blue line, where it runs clear of the red line at the right side of the chart, tells you we have probably reached a peak in bankruptcies now. So when our report on the figures refers to worsening personal bankruptcies I have my doubts. The latest figures say the total amount of credit card advances (the apparent culprit for these bankruptcies) have come down since the end of last year while banks continue to report declining figures for classified loans, loan delinquencies and loan losses. Several people I know who have large credit card balances outstanding tell me they have come under increasing pressure to pay up. There was undoubtedly reason for concern here and our financial system has responded to it. There's the real story. The analysts say there is no signal of a return to high employment levels. What signal do these analysts want? As the second chart shows, our economy has created more than 46,000 jobs over the past three months alone. Another two months of this and we will have reached an all-time record in employment numbers. The only reason our unemployment rate did not fall further than 7.4 per cent from a peak of 7.8 per cent in July is that over the past three months we also had 50,000 people joining the labour force. That is the equivalent of about four years worth of natural increase (births over deaths) in our population at present. Just for argument's sake, let us say that the labour force had remained static since the end of June. Our unemployment rate would in that case be under 6 per cent now. Will someone tell these 'analysts' to look at some figures for a change? Graphic: jake23gbz
