Unemployment edges higher but remains below 7 per cent
Australia’s unemployment rate has edged up from 6.8 to 6.9 per cent, with almost 30,000 jobs lost last month.
Economists had been expecting a bigger rise after the unemployment rate unexpectedly dipped in August from a high of 7.5 per cent in July.
However, while there were 29,500 fewer employed people, the number of Australians officially classed as unemployed by the Bureau of Statistics only rose by 11,300.
The main reason for this was that some people stopped looking for work, with the so-called participation rate dipping from 64.9 to 64.8 per cent.
Victoria led this decline due to a combination of the Melbourne lockdown and easier rules for claiming JobSeeker.
“Victoria led the fall in employment, with a 1.1 per cent fall, but with mutual obligation (the requirement to seek work while receiving JobSeeker) not re-introduced in the state, this decline was matched with a fall in the participation rate, and the unemployment rate actually declined,” said Sarah Hunter from BIS Oxford Economics.
Over the past year, the number of employed people fell by nearly 360,000, while the number of unemployed only rose by just under 230,000, as many people gave up looking for jobs or were locked down last month and unable to work.
This means that only 60.3 per cent of Australians have a job — slightly higher than the pandemic lows earlier this year, but otherwise at the lowest levels in more than a decade.
Underemployment has also surged, rising three percentage points over the past year, leaving 11.4 per cent of Australian workers without as many hours of work as they need or want.
However, Ben Udy from Capital Economics thinks the “unemployment rate is past its peak” and will fall towards 6 per cent by the end of this year.
“We think things will improve from here,” he said.
“The restrictions on activity in Victoria were eased a little in late September [which wouldn’t have been captured in today’s data] and, given the fall in new daily cases, are likely to be eased further in the coming months.
“Admittedly, JobKeeper payments were scaled back in October and will be further reduced in January.
“The cost to employers of keeping someone staff working will therefore go up. That may lead some employers to shed staff.
“But we think any impact will be offset by the continued economic recovery, and by the Government’s new JobMaker hiring credit.”