Unemployment rises to 7.4% in June

author-avatar By on July 16, 2020
Unemployment rises to 7.4% in June

Photo by madeleine ragsdale on Unsplash

Australian Bureau of Statistics data reveals the unemployment rate rose to 7.4% in June, up from 7.0% in May as more people look for work.

There was an increase of 210,800 employed people (seasonally adjusted) from May and June as COVID-19 restrictions were eased, according to Australian Bureau of Statistics' (ABS) head of labour statistics Bjorn Jarvis.

"The easing of COVID-19 restrictions in June saw an extra 280,000 people in the labour force, with more people in employment, and more actively looking and available for work," he said.

“In June, around 24% of the fall in employment through to May had been regained."

The 280,000 figure is a gross figure and does not account for people who subsequently lost their jobs.

However, 249,000 people rejoined the labour force in a part-time capacity, and there was a decrease by 38,100 in full-time employment. 

Unemployment data is in part measured by people actively looking for work, and in June the participation rate was 64%, up from 62.7% in May.

Hours worked also increased four percentage points in June, and the underemployment rate fell from 13.1% in May to 11.7% in June.

In April, when COVID-19 lockdowns peaked, the unemployment rate was a comparatively low 6.2%, thought to be lowered by JobKeeper and a fall in the participation rate i.e. people withdrawing from the labour force entirely. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayment
 
Fixed 2 Years 70% LVR
2.19% 2.56% $1,517 Go to site
2.59% 2.55% $1,599 Go to site
Budget Home Loan OO P&I
2.68% 2.74% $1,618 Go to site

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 03 August 2020. View disclaimer.

Young people experience mixed results

The 15-24 year old age bracket had an increase in the participation rate in June, up 3.9 points to 63.5%.

In June, 101,500 young people found work, however the unemployment rate increased by 0.4 points to 16.4%. 

For the wider labour force, if those that are working zero hours for economic reasons are added to the unemployment rate, that rate would sit at 8.8%, according to the ABS.

More to come with Melbourne lockdowns

Although there were signs of recovery in June, Melbourne experiencing a surge in COVID-19 and the city's corresponding lockdowns could set things back next month, according to Westpac Senior Economist Justin Smirk.

"Looking forward, the June update suggests we are past the worst for job losses and have entered a recovery phase," he said.

"However, that was before outbreak took off in Victoria resulting in the lockdown of the Melbourne regional area.

"And the improvement in employment opportunities has seen workers surge back into the labour force lifting participation.

"Even without the Melbourne lockdown, we would have been looking for unemployment to continue to rise from here on the back of rising participation.

"With that lockdown the risks lie to the higher side of our expectations."


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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