It has been apparent for some time Australia's economic golden years are fading into the rear-view mirror, Milford Asset Management portfolio manager David Lewis says.
However, it was still surprising to see in last week's report on the state of the Australian labour market just how difficult the situation had become for Australian workers in recent months.
The most widely watched indicator of the labour market showed the Australian unemployment rate moved just 0.1% higher in the month of December, to 5.8%. At the start of 2013 it was 5.4%, and in June it was 5.7%.
The number of people employed in Australia dropped by 22,600 in December to its lowest ebb since March.
Through the whole of last year, the number of people with jobs rose by just 54,600.
The last time such a small rise was recorded over a 12-month span was in the year to October 2009.
Mr Lewis said, as in many countries in the world at present, the unemployment rate was telling only part of the story.
When national statistical agencies calculated unemployment, people were first asked if they were actively looking for work.
If the answer was no, they were not considered part of the labour force.
If the answer was yes, they were ''participating'' in the labour force, and would be counted either as employed if they had a job, and unemployed if not.
The unemployment rate was then calculated as the number of people unemployed (looking for work, but without a job) divided by the labour force, Mr Lewis said.
''The crucial piece of this story in Australia over the past six months is that fewer and fewer people are actually looking for a job. Technically, this reduces the number of unemployed, and holds down the unemployment rate compared to where it would otherwise have been.''
Most of these people saying they were not looking for a job were probably doing so because they did not expect to find one - which was bad news, he said.
If the participation rate had not changed from its prior cyclical low in September 2009, the unemployment rate in Australia would now be 6.9%, and would have risen by a full 1% since June.
''We believe this provides a more accurate reflection of how difficult conditions are for Australian workers at present. Conditions are nowhere as bad as in the early '90s recession when there was 11% unemployment - but they are a lot worse than the low published unemployment rate of 5.8% would suggest.''
New Zealand's recent performance provides a sharp contrast.
Its unemployment rate of 6.2% fell by 1% versus the previous corresponding period.
The total number of jobs here grew by 2.4% over that time.
Participation in our labour force had improved, and there were now 64.3% of the working-age population in employment, up by 0.8% over the year.
All of those indicators highlighted a labour market that had made strong steps forward over the year, Mr Lewis said.
In the short term, while conditions were not yet strong, the labour market in New Zealand was improving.
''This helps create a virtuous cycle of more spending, more jobs, and lower welfare costs. These factors tend to support share markets, provided the situation does not get too strong such as to require much higher interest rates to quell inflation.''
In Australia, the labour market had weakened considerably in recent months.
That meant pressure on profits for consumer-facing companies.
The good news was indicators for the future health of the Australian labour market such as confidence, house prices, and job advertising were improving.
That suggested the recent weakness should stabilise.
If the labour market failed to stabilise, the Reserve Bank of Australia would be forced into cutting interest rates again.
Parity on the Australia-New Zealand exchange rate then became a real possibility, Mr Lewis said.
