Roy Morgan unemployment falls, underemployment lifts

The latest Roy Morgan Research (RMR) unemployment estimate for July fell 0.5% to 8.7%, and was up 1.3% year-on-year:

However, underemployment has risen by 1.0% over the past year to 9.6%, with labour underutilisation tracking at 18.3% (unchanged from a year ago):

Below are the key points from the release:

  • The workforce, which comprises employed Australians and those who are unemployed and looking for work, has increased year-on-year by 214,000 to 13,564,000. The increasing workforce was driven entirely by an increase in employment.
  • Employment was up 361,000 to 12,382,000 in July 2019 and the rise in employment was driven by a significant increase in full-time employment of 625,000 to 8,390,000. However, over the past year part-time employment has declined by 264,000 to 3,992,000;
  • Unemployment was down 147,000 on a year ago to 1,182,000 Australians and the unemployment rate is down by 1.3% to 8.7%;
  • However, under-employment has increased by 150,000 to 1,298,000 Australians (up 1% to 9.6% of the workforce) over the past year which includes Australians working part-time and looking for more work;
  • Roy Morgan’s real unemployment figure of 8.7% for July is significantly higher than the current ABS estimate for June 2019 of 5.2%, although Roy Morgan’s under-employment estimate of 9.6% is comparable to the current ABS underemployment estimate of 8.2%;
  • Roy Morgan’s total unemployment and under-employment of 2,480,000 Australians (18.3% of the workforce) in July, virtually unchanged on a year ago.

As explained each month, RMR measures employment differently from the ABS:

According to the ABS definition, a person who has worked for one hour or more for payment or someone who has worked without pay in a family business, is considered employed regardless of whether they consider themselves employed or not.

The ABS definition also details that if a respondent is not actively looking for work (ie: applying for work, answering job advertisements, being registered with Centre-link or tendering for work), they are not considered to be unemployed.

The Roy Morgan survey, in contrast, defines any respondent who is not employed full or part-time and who is looking for paid employment as being unemployed…

Since Roy Morgan uses a broader definition of unemployment than the ABS, it necessarily reports a higher unemployment figure. In addition, Roy Morgan’s measure tends to be far more volatile, owing to the fact that it draws on a smaller sample than the ABS and is not seasonally adjusted.

The difference between the ABS unemployment rate (5.1% NSA in June) and the unofficial RMR measure has narrowed to 3.6%:

Leith van Onselen

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