Unemployment rises to 3.7%

More people leaving jobs too, ABS reports

Unemployment rises to 3.7%

Unemployment has risen slightly to 3.7% in January, according to the latest figures released by the Australian Bureau of Statistics.

The January seasonally adjustment unemployment rate of 3.7% compares to a rate of 3.5% in December.

“With employment decreasing by around 11,000 people, and the number of unemployed increasing by 22,000 people, the unemployment rate rose to 3.7%,” said ABS head of labour statistics Bjorn Jarvis (pictured above). "This was the second consecutive monthly fall in seasonally adjusted employment but followed very strong growth during 2022.”

Jarvis said while the employment to population ratio fell between December and January, down 0.2 percentage points to 64.0%, it was still 0.5 percentage points higher than January 2022 and 1.6 percentage points higher than March 2020.

Along with a larger-than-usual increase in unemployed people in January, there was also a similarly larger-than-usual rise in the number of unemployed people who had a job to go to in the future.

“January is the most seasonal time of the year in the Australian labour market, with people leaving jobs but also getting ready to start new jobs or return from leave,” Jarvis said. “This January, we saw more people than usual with a job indicating they were starting or returning to work later in the month.”

The ABS report showed that the seasonally adjusted participation rate fell 0.1 percentage point to 66.5% in January, down from the series high of 66.8% in mid-2022.

Hours worked and annual leave

Seasonally adjusted monthly hours worked also fell by 2.1%, which reflected a higher-than-usual number of people taking annual leave in January, Jarvis said.

“Early January is the seasonal peak in people taking annual leave,” he said.

“As in 2021 and 2022, January 2023 again saw more people than usual taking annual leave. Around 43% of employed people worked reduced or no hours because they were on leave, compared with around 41% of employed people over the same period before the pandemic.”

In January 2023, the proportion of people away from work on sick leave was back around the average, pre-pandemic level, unlike January 2022, when more people than usual were away from work on sick leave.

Underemployment and underutilisation

The ABS said seasonally adjusted underemployment rate remained at 6.1%, 0.4 percentage points below January 2022.

The underutilisation rate, which combines the unemployment and underemployment rates, rose 0.2 percentage points to 9.8% in seasonally adjusted terms. This was 0.9 percentage points lower than January 2022.

Underlying trend data for employment and unemployment

Trend employment increased by 11,000 people (0.1%) in January 2023, and trend monthly hours worked increased 0.2%.

“The latest monthly increase in trend employment was around half of the monthly average for the 20 years before the pandemic, having been above the average for most of 2022,” Jarvis said.

The trend unemployment rate remained at 3.5% for the sixth consecutive month, while the trend underemployment rate remained unchanged from December 2022, at 6.1%.

The trend participation rate decreased 0.1 percentage point to 66.5%.

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