Unemployment, underemployment at lowest rate since 2008

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on January 20, 2022 Fact Checked
Unemployment, underemployment at lowest rate since 2008

The Australian labour market continues to bounce back post-Delta with rises in employment matching falls in unemployment.

Off the back of a record November, employment continues to rise across Australia, increasing by 65,000 people according to seasonally adjusted figures released by the ABS.

The rise of 0.5% in employment is matched by a 0.5% fall in unemployment to 4.2%.

Head of Labour Statistics at the ABS Bjorn Jarvis said the latest data shows further employment recovery.

"This is the lowest unemployment rate since August 2008, just before the start of the Global Financial Crisis and Lehman Brothers collapse, when it was 4.0%,” Mr Jarvis said.

"This is also close to the lowest unemployment rate in the monthly series – February 2008 – and for a rate below 4.0% we need to look back to the 1970s when the survey was quarterly."

Mr Jarvis says recovery in New South Wales and Victoria continued to have a large influence on the national figures.

"Employment in these two states increased by 32,000 and 25,000 people between November and December," Mr Jarvis said.

"Their employment was around where it had been in May having fallen 250,000 and 145,000 during the lockdowns."

Alongside unemployment, the underemployment rate fell 0.8 percentage points to 6.6% in December.

This is earmarked as the lowest underemployment rate since November 2008, underpinned by a large fall in youth underemployment.

The ABS saw the participation rate remain constant in December from November, idling at 66.1%. 

Westpac Senior Economist Justin Smirk said flat participation is why there was an outsized fall in the unemployment rate to 4.2% from 4.6%.

"We have not expected the unemployment rate to hit 4.2% until May this year highlighting the labour market continues to significantly outperform expectations," Mr Smirk said.

Hours worked follows employment trend, increasing 1.0%

Hours worked increased 1.0% in December and was 0.1% higher than results recorded in May 2021.

For the fourth consecutive month, to December hours worked increased in New South Wales by 2.0%.

Victorian hours worked also continued an upward trend, increasing by 1.4% following a 9.7% increase in November.

Mr Jarvis said the number of employed people who worked no hours due to economic and other COVID-related reasons fell from 138,000 people down to 85,000 people.

Callam Pickering, APAC economist at global job site Indeed, said not only are people currently finding work, but they are also increasingly finding the hours they need.

"The economy is well placed to drive the unemployment rate lower, due to the strong demand for talent,” Mr Pickering said.

“This is another sign that wage pressures may begin to rise throughout 2022."

ANZ Senior Economist Catherine Birch said today’s labour market data was little affected by Omicron as the reference period ended before cases surged.

“Omicron will have an effect on the labour market over coming months, but we think any downside will be small and short-lived,” Ms Birch said.


Image by Kraken Images via Unsplash.

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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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