Yahoo Finance 11,000 jobs lost as unemployment rises
Unemployment rose to 3.7 per cent in January.
Around 11,000 Aussies lost their job in January, causing the unemployment rate to rise from 3.5 per cent last month to 3.7 per cent.
The seasonally adjusted unemployment rate rose to 3.7 per cent in January, according to data from the Australian Bureau of Statistics (ABS).
"This was the second consecutive monthly fall in seasonally adjusted employment but followed very strong growth during 2022,” ABS head of labour statistics Bjorn Jarvis said.
"While the employment-to-population ratio fell between December and January - down 0.2 percentage points to 64.0 per cent - it was still 0.5 percentage points higher than January, 2022 and 1.6 percentage points higher than March, 2020.
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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.”
What does this mean for interest rates?
Yes - unemployment numbers do factor into the Reserve Bank of Australia’s (RBA) decision making, so these figures will be of interest to them going forward.
In its February interest rate decision, RBA governor Philip Lowe said the central bank was anticipating unemployment to rise as Australia struggled to get economic conditions (mostly higher inflation) under control.
“The labour market remains very tight. The unemployment rate has been steady at around 3.5 per cent over recent months - the lowest rate since 1974,” he said at the time.
“Job vacancies and job ads are both at very high levels, but have declined a little recently. Many firms continue to experience difficulty hiring workers, although some report a recent easing in labour shortages.
“As economic growth slows, unemployment is expected to increase. The central forecast is for the unemployment rate to increase to 3.75 per cent by the end of this year and 4.5 per cent by mid-2025.”
Lowe is saying that despite unemployment rising, interest rates are still expected to climb.
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