As already reported, Australia’s unemployment rate rose 0.1% in August to 4.6% – close to the lowest reading since December 2008:
However. total jobs fell by 138,000 to 12,884,600 people in September, with part-time jobs declining 164,700, partly offset by a 26,700 increase in part-time jobs:
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The reason why the unemployment rate only rose 0.1% despite the heavy loss of jobs is because lockdowns caused an ever bigger fall in labour force participation, which slumped 0.7% to 64.5%:
The next chart plots the fall in the participation rate from a historical perspective:
Still, total employment has rebounded 6.1% from its May 2020 low and is now running 0.9% below its pre-COVID level:
Full-time employment has rebounded 5.3% from its June 2020 low and is now 1.3% above its February 2020 pre-COVID level.
By comparison, part-time employment has rebounded 8.5% from its May 2020 but is still 5.4% below its February 2020 peak:
Hours worked is a far better measure of labour market strength, given it is not impacted by changes in the participation rate. The news is brighter here with aggregate hours worked rebounding 0.9% in September to be running 2.4% below its February 2020 pre-COVID level. Lockdowns are clearly having a huge impact:
Finally, the underemployment rate fell 0.1% to 9.2% and is now tracking 1.8% above its May 2021 low. Underutilisation rose 0.1% to 13.9%. Both are now tracking above their pre-COVID levels of 8.6% and 13.7% respectively:
In summary, the recent sharp fall in the headline unemployment rate to a near 13 year low gives a false impression of Australia’s labour market, which has been hit hard by lockdowns.
Australia’s V-shaped labour market recovery ended on the back of the Delta strain.
But with Sydney now opening, and Melbourne to follow over the coming month, it should begin recovering again – at least until the mass immigration program is rebooted.
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