ABS data shows decrease in jobless rate, work hours amid high interest rates

Economist notes small businesses are feeling the pressure

ABS data shows decrease in jobless rate, work hours amid high interest rates


By Jonalyn Cueto

The Australian Bureau of Statistics (ABS) has revealed that the unemployment rate declined to 3.6% in September. Economists had forecasted that the jobless rate would remain unchanged at 3.7%. According to an ABC News report, this number resulted from fewer Australians looking for work.

A net 6,600 jobs were created, but full-time positions were reduced by 39,900. "The labour market needs to generate around 37,000 jobs a month currently to keep the unemployment rate flat on an unchanged participation rate,” said Gareth Aird, head of Australian economics of Commonwealth Bank.

Recent data shows the participation rate in September fell to 66.7%, pushing unemployment lower.

"The fall in the unemployment rate in September mainly reflected a higher proportion of people moving from being unemployed to not in the labour force," said Kate Lamb, head of labour statistics at ABS. She said the past two months saw an average monthly employment growth of 35,000, which is the average growth seen in the past year.

Working hours cut with SMEs feeling the pressure

On the latest ABS data, Anneke Thompson (pictured above), chief economist of CreditorWatch, said overall hours worked decreased by 0.1%, and the participation rate fell from record highs. There is some easing in the tightness of the labour force, but it may also reflect a decrease in the working hours in industries that offer more casual positions.

“This data suggests some easing in the tightness of the labour force, and may also reflect lower hours worked in industries that offer more casual hours,” said Thompson. She said the discretionary retail sector is being heavily impacted by very low consumer confidence and high interest rates, while it is also a sector with a large number of workers on hourly rates.

“It is therefore not surprising that hours worked is starting to fall. The construction sector also is a large employer of casual labour, and the slowdown in building approvals is also starting to bite this sector,” she said.

Small businesses are seeing a decrease in the annual value of invoices, according to data from CreditorWatch. Thompson said this reflects the lower job values being experienced by the sector.

“While not a new trend, it is continuing following lockdown periods, when we first recorded the value of invoices dropping. This suggests that smaller businesses are probably feeling the slowdown in business conditions earlier than bigger businesses, and reducing hours of work offered as a result,” said Thompson.

Have thoughts about the latest data? Let us know in the comments below.

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