Unemployment down again, but it’s not all good news

Bjorn Jarvis, head of labour statistics at the ABS, said while the number of people working fewer hours due to sickness was around a third higher than usually seen in October, it was no longer two to three times higher as it was earlier in 2022.

“October was the first month in 2022 where the number of people was less than half a million (467,000),” he said.

According to the latest statistics, employment increased by around 32,000 people, the number of unemployed decreased by 21,000 people, and the unemployment rate fell by 0.1 percentage point to 3.4 per cent.

However, with such low unemployment, it indicated that the rate rises from the Reserve Bank of Australia are not cooling the economy as was expected, said jobs website Indeed’s Asia-Pacific economist, Callam Pickering.

“This jobs report confirms that the demand for workers hasn’t deteriorated at all since the RBA began hiking rates in May,” he said.

“If Australian businesses were genuinely concerned about the economic outlook and the impact of high inflation and rising interest rates then we’d expect them to pull back on their hiring.”

He said the job market is incredibly favourable to jobseekers and challenging for recruitment.

“Jobseekers have greater choice in where and how they work and are well-positioned to bargain for higher wages or better conditions,” he said.

“They have also taken advantage of that, pushing job mobility to a decade high.”

The ABS data showed for men, the seasonally adjusted unemployment rate fell 0.3 percentage points to 3.2 per cent, the lowest rate since November 1974. For women, it remained steady at 3.6 per cent.

The seasonally adjusted participation rate remained steady at 66.5 per cent, slightly below the historical high of 66.7 per cent.

“The participation rate was 0.2 percentage points below the record high of 66.7 per cent in June 2022, but 0.7 percentage points higher than before the pandemic,” Mr Jarvis said.

The participation rate fell slightly for men, down to 70.9 per cent, and remained steady for women at 62.3 per cent.

Seasonally adjusted monthly hours worked increased by 2.3 per cent, stronger than the growth in employment (0.2 per cent). This stronger growth in hours partly reflected fewer employed people than usual taking leave during October.

“The number of people who worked fewer hours because they were on annual leave increased between September and October, consistent with school holidays and public holidays. However, the number of people on annual leave in October 2022 was around 10 per cent less than we typically see at this time of the year,” Mr Jarvis said.

Flood events across NSW, Victoria, and Tasmania saw more people working reduced hours due to bad weather, increasing from 66,000 people in September to 100,000 in October 2022.

The seasonally adjusted underemployment rate fell 0.1 percentage point to 5.9 per cent, 2.8 percentage points below the pre-pandemic rate.

The under-utilisation rate, which combines the unemployment and underemployment rates, fell 0.2 percentage points to 9.3 per cent in seasonally adjusted terms. This was 4.6 percentage points below March 2020 and the lowest rate since March 1982.

“The low underutilisation rate of 9.3 per cent in October 2022 reflects the fact that there are now around 236,000 fewer unemployed people and 365,000 fewer underemployed people than in March 2020. Unemployment and underemployment are both now around two-thirds of what they were,” Mr Jarvis said.

Trend employment increased by 17,000 people in October 2022 (0.1 per cent) consistent with the 0.1 per cent increase in trend monthly hours worked.

“Although employment in seasonally adjusted terms rose 0.2 per cent in October 2022, the underlying trend estimate was monthly growth of around 0.12 per cent. This was below the average for the 20 years prior to the pandemic of 0.16 per cent,” Mr Jarvis said.

“This indicates that while employment has continued to grow, the rate of growth has slowed to below the longer-term average. It has been below this average for the past five months.

“While employment growth had slowed, the employment to population ratio remains elevated at 64.3 per cent in trend terms, 2.0 percentage points higher than before the pandemic. This difference was even more pronounced for the ‘working age population’ (those aged 15–64 years), at 77.7 per cent, which was 3.4 percentage points higher than March 2020.

“The working-age population in Australia is more employed than it has ever been. Working-age women have seen a particularly rapid increase, compared with the eve of the pandemic, from 70.5 per cent to 74.2 per cent.”

The trend unemployment rate fell slightly to 3.4 per cent and the underemployment rate remained steady at 6.0 per cent. 

The trend participation rate remained steady at 66.6 per cent.

Today’s (18 November) release includes additional analysis of hours worked and historical charts back to 1966.