Australia’s unemployment rate has continued to languish at 3.7% in August in seasonally adjusted terms, with employment growing by around 65,000 people and those unemployed down by just around 3,000 people, according to fresh Australian Bureau of Statistics (ABS) data.
“The large increase in employment in August came after a small drop in July, around the school holiday period,” said Bjorn Jarvis (pictured above), ABS head of labour statistics. “Looking over the past two months, the average employment growth was around 32,000 people per month, which is similar to the average growth over the past year.”
The employment-to-population ratio lifted 0.1 percentage point to 64.5%, near the record high recorded in June. The participation rate, meanwhile, increased to a record high of 67% in August, which, when combined with the high employment-to-population ratio, “continues to reflect a tight labour market,” Jarvis said.
The ABS data showed that monthly hours worked slightly decreased by 0.5% in August, after a 0.2% lift in July, while employment ticked up by 0.5%.
Despite a small fall in August, hours worked were higher by 3.7% compared to the same month in 2022, continuing to reflect faster growth than the 3% annual increase in employment.
“The strength in hours worked over the past year, relative to employment growth, shows the demand for labour is continuing to be met by people working more hours, to some extent,” Jarvis said.
The underemployment rate rose 0.2 percentage points to 6.6% in August. That figure was up 0.6 points compared to August 2022, but was still lower by around 2.2 points pre-pandemic. The underutilisation rate, which combines the unemployment and underemployment rates, was up 0.1 points to 10.2%. This was 0.8 points higher than last August, and 3.7 points lower than March 2020.
“While we have seen the underutilisation rate increase over the past year, from the recent low of 9.3% in October 2022 up to 10.2%, it is still well below the 14% in March 2020. Before the pandemic the last time we saw it this low was in September 2008,” Jarvis said.
In trend terms, unemployment rate kept on hold at 3.7%, consistent with the updated figure for July.
Employment grew by 0.2%, or around 28,000 people, while hours worked had a 0.2% rise in August. Over the past year, employment has increased by 2.9% and hours worked by 4.6%.
The employment-to-population ratio was still near the historical high of 64.5%, for the fifth consecutive month in August. Both the participation rate and the underemployment rate bumped up by less than 0.1 percentage point to 67% and 6.5%, respectively.
“In trend terms, all key indicators still point to a tight labour market,” Jarvis said.
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