Yahoo Finance Unemployment jumps to 5.2% as Aussies resume job hunt
The unemployment rate in Australia has risen to 5.2 per cent as more people start looking for work.
Around 46,000 jobs were lost, but the participation rate increased as lockdown restrictions were eased and Aussies were able to look for work again.
The unemployment rate dropped during lockdowns because people simply weren't looking for work and therefore were not counted in official figures.
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Bjorn Jarvis, head of labour statistics at the ABS, said the latest data covered the period from 26 September to 9 October.
That period covered school holidays and some of the very early stages of lockdown restrictions easing, particularly in New South Wales.
“As we’ve seen throughout the pandemic, the changes in the labour markets with lockdowns continued to have a large influence on the national figures,” Jarvis said.
“There was early recovery in New South Wales, with their participation rate increasing by 0.8 percentage points in October.”
In NSW around 22,000 people got back into the workforce, while another 35,000 resumed actively looking for work.
This means there was an increase of around 57,000 people in NSW in the labour force, however that was still 218,000 people lower than in May.
“In contrast, while Victoria’s unemployment also increased, by 29,000 people, employment fell by a further 50,000, with their participation rate falling by 0.4 percentage points,” Jarvis said.
“The Victorian labour force was 113,000 people lower than in May.”
Jobs coming back
The national participation rate increased by 0.1 percentage points to 64.7 per cent in October but was 1.6 percentage points below May.
This was the first increase in the participation rate since June 2021, which reflected a large increase in unemployment (82,000 people).
“The increases in unemployment show that people were preparing to get back to work, and increasingly available and actively looking for work,” Jarvis said.
“This follows what we have seen towards the end of other major lockdowns, including the one in Victoria late last year.
Jarvis said while it may seem concerning that the unemployment rate has risen, conditions are improving.
“It may seem counterintuitive for unemployment to rise as conditions are about to improve. However, this shows how unusual lockdowns are, compared with other economic shocks, in how they limit being able to work and look for work,” he said.
Despite the loss of jobs, the data is backwards looking and has not yet taken into account the reopening of New South Wales and Victoria.
The most recent Job ads data from Seek found that employers advertising for positions has hit an all-time high.
National job ads rose 10.2 per cent last month, but were 63.2 per cent higher nationally, compared to last year, and 44 per cent higher than 2019, pre-pandemic.
Skills shortage threatens recovery
And while booming job ads is a good indicator of a recovering economy, a shortage of skilled workers is looming, posing big issues for employers around the country.
A combination of closed borders and workers leaving Australia to go back to their home countries when the pandemic hit has left many employers without the workers to fill the roles.
So, while job ads are higher than ever before, not enough people are applying with applications per ad low compared to historical trends.
“One of the many factors that impact hirers who find it challenging to recruit is the very large number of open roles currently available,” Seek ANZ managing director Kendra Banks said.
“Despite site visits remaining high, there is still a hesitancy, particularly with customer-facing roles, with people not wanting to move jobs just yet.”
RBA watching jobs figures
The Reserve Bank governor Philip Lowe has been clear that the central bank has been watching the unemployment rate closely.
In his most recent statement on monetary policy, Lowe said the bank predicts the unemployment rate will go down next year.
“The central forecast is for the unemployment rate to trend lower over the next couple of years, reaching 4.25 per cent at the end of 2022 and 4 per cent at the end of 2023,” Lowe said.
Lowe has said the bank will not raise the cash rate until inflation is within the 2 to 3 per cent target, wages have lifted and the unemployment rate is below 4.5 per cent.
Lowe said low unemployment will likely lead to higher wages, which have remained stubbornly low.
“Wages growth is expected to pick up gradually as the labour market tightens, with the Wage Price Index forecast to increase by 2.5 per cent over 2022 and 3 per cent over 2023,” Lowe said.
In comparison, the most recent wages data showed wages increased just 0.6 per cent in the June quarter of this year.
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