The latest Roy Morgan Research (RMR) unemployment estimate for October showed strong improvement, falling by 0.9% over the month to 7.8%:
Over the year, unemployment fell by 1.6%.
Underemployment has also fallen by 0.3% over the past year to 8.9%, with labour underutilisation tracking at 16.7% (down from 1.9% 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 330,000 to 13,789,000. This increase was driven entirely by an increase in full-time employment, as unemployment and part-time employment fell.
- The number of Australians in employment was up 520,000 to 12,714,000 in October 2019 – a rise driven by a significant increase in full-time employment of 695,000 to 8,582,000. Over the past year part-time employment has declined by 175,000 to 4,132,000.
- Unemployment, the number of Australians looking for work, was down 190,000 on a year ago, to 1,075,000 Australians, and the unemployment rate was down by 1.6% to 7.8%. Under-employment, Australians working part-time and looking for more work, is little changed from a year ago at 1,232,000 (down 10,000) and is now 8.9% of the workforce, a drop of 0.3% points on a year ago.
- Roy Morgan’s unemployment figure of 7.8% for October is higher than the current ABS estimate for September 2019 of 5.2%, although the gap between the two measures is the closest it has been in four years, since September 2015. Roy Morgan’s under-employment estimate of 8.9% is now slightly above the current ABS under-employment estimate of 8.3%.
- Roy Morgan’s total unemployment and under-employment of 2,307,000 Australians (16.7% of the workforce) in October, down 200,000 on a year ago, is larger than figures usually proffered, but the biennial ABS survey the ‘Barriers and Incentives to Labour Force Participation’, last released in 2017, claimed the much higher figure of 2.7 million Australians would like a job or to work more hours – including 1.1 million people who wanted a job but were excluded from the Labour Force.
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 (5.3% NSA in September) and the unofficial RMR measure has narrowed to 2.7%:
We don’t see this ‘improvement’ as sustainable, given the dwelling construction bust, which is all but baked-in:
Alongside weakness across discretionary spending:
Later this morning we will receive the ABS’ labour force data for October, which will provide more colour.
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