Recent data on retail sales, dwelling approvals and credit suggests the economy entered 2006 with improved momentum in domestic demand.

If it hadn't been for the mining boom, Australia might be in a recession now.

States with the strongest demand for labor are also those which are experiencing a lift in economic activity from the mining boom and the associated strong investment in new productive capacity and infrastructure.

The latest ANZ job advertisements data suggest that there will be no improvement in the labor market over the next few months, with little prospect of significant growth in employment and with the unemployment rate likely to trend higher.