The labour market continues to heavily favour workers, with over a quarter of Australian businesses reporting at least one vacant position.

Throughout 2022, nearly 65% of the Australian population has been in employment, the highest figures in the previous decade.

The December figures did see a slight drop in the participation rate, which is the labour force as a percentage of the total working population (15-64 year olds).

The participation rate now sits at 66.6%, a figure which Lauren Ford, head of labour statistics at the ABS, said remained well above historic numbers.

"The seasonally adjusted participation rate fell 0.2 percentage points to 66.6% in December, back to around where it was in October," Ms Ford said.

"Despite this slight fall from its historic high, it finished the year 0.8 percentage points higher than its pre-pandemic level."

Sick days continue to increase

The ABS release also highlighted the continued trend of more working hours reduced due to illness.

Monthly hours worked in all jobs increased slightly from December in trend terms, from 1.885 billion to 1.9 billion.

Ms Ford though said that this was in spite of workers continuing to take unusually high levels of sick leave.

"In December, we saw the number of people working reduced hours due to illness increasing by 86,000 to 606,000, which is over 50% higher than we would usually see at this time of the year," she said.

Despite sick days ramping up, Westpac economist Justin Smirk said it was surprising there weren't more people taking annual leave in the holiday period.

"We were surprised that the number of people working fewer hours due to annual leave, flextime or long service leave decreased in December 2022," Mr Smirk said.

"The proportion of employed people taking annual leave in December 2022 was 6.1%, slightly below the pre-pandemic December average of 6.7%.

"Having been the first clear summer break since the Covid pandemic we had thought that the number on leave would be higher than average in December. 

"December is always a tricky month as there is normally a last minute run up in employment before the Christmas and summer holidays."

Trends into 2023

The December figures cap off a strong year for employment in Australia, with trend employment growing by 27,000 people, or 0.2%.

This figure remains above the 20 year pre pandemic average (0.16%).

However, this monthly employment increase is just over half of the average for the first half of 2022 (0.37%), showing employment growth moderating through the year.

The figure is also slightly below the average for the second half of 2022 (0.21%), which could be an indication that the labour market may be beginning to balance itself out.

This release comes a week after job vacancy rates were published, showing 444,200 job vacancies across the country.


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