Australia’s jobless rate remained steady at 3.9% in April, hovering at near half-century lows, as the economy added a small number of new jobs and employees worked longer hours.
The nation’s unemployment rate last month was a seasonally adjusted 3.9%, the Australian Bureau of Statistics reported on Thursday, compared to 3.9% for March which was revised down from 4%.
The economy added about 4,000 jobs in a month disrupted by Easter. Some economists had predicted staff roles would have expanded by a net 30,000 with the jobless rate dropping to 3.8%.
April's jobless rate came in at 3.9%, in line with a revised 3.9% figure for March, the ABS says. About 4000 new jobs added, or fewer than the 20-30,000 expected. #auspol #ausvotes pic.twitter.com/wwLMWM8PPe
— Peter Hannam (@p_hannam) May 19, 2022
The “3.9% is the lowest the unemployment rate has been in the monthly survey,” Bjorn Jarvis, head of labour statistics at the ABS, said. “The last time the unemployment rate was lower than this was in August 1974, when the survey was quarterly.”
In April, hours worked increased 1.3%, or 23m hours, to 1.833bn hours, while the participation rate that gauges the share of those of working age in the workforce or seeking jobs eased back o.1 percentage points to 66.3% but remained near historic highs.
The labour market figures are the last major data to drop before the federal election on Saturday. The Coalition had hoped to be campaigning on a strong economy but unexpectedly high inflation prompted the Reserve Bank of Australia to lift its key interest rate for the first time in 11 years and Wednesday’s weak wage growth numbers complicated their pitch.
The rising cost of living – including petrol prices creeping back above $2 a litre in cities despite the temporary halving of the fuel excise – has also taken some of the edge off a jobless figure not seen in Australia since the early 1970s.
Declining unemployment rates have been common across most rich economies as soaring debt levels during the Covid pandemic fuelled rapid rebounds. The UK, US and New Zealand have jobless rates in the 3%-range, while Germany and Japan have 2%-plus.
Prior to today’s numbers being released, NAB said with job vacancies and job ads still high, further gains were imminent. “We see unemployment reaching around 3.5% by around the middle of the year,” it said.
Among the states, WA’s jobless rate dived to 2.9%, down from 3.4% in March, overtaking the ACT as the best performing region. Canberra’s rate of 3.1% unemployed was down from March’s 3.4%.
NSW, the most populous state, was another big mover, with its jobless rate down to a record low 3.5% (from 3.9%), while Victoria went the other way to 4.2% (from 4.0%). Queensland and SA both landed at 4.5%, while Tasmania improved sharply from 4.5% to 3.8%, while the NT was unchanged 4.1%.
Nature and Covid, played different roles. The flood crisis in Queensland and NSW eased during April, so that the number of people working fewer hours because of disruptions sank from more than half a million to about 70,000.
On the other hand, the rising numbers of Covid-19 cases in April meant those working reduced hours due to illness continued to be high, the ABS’s Jarvis said.
“Around 740,000 people worked reduced hours in April because of illness, almost double what we usually saw in April before the pandemic,” he said. “Of these people, around 340,000 worked no hours, which was around triple what we would usually see.”
Catherine Birch, a senior ANZ economist, noted the April figure was almost 3.8% on rounding, with a decline in the participation rate key to nudging that number lower.
“[It was also] a real positive to see underemployment continue to fall, with the part-time employment ratio dropping to 30.3%, the lowest outside of lockdown periods since 2013,” Birch said.
“Given the disappointing wages data yesterday and the fact unemployment came in in line with market expectations today, a 25 basis-point cash rate hike [by the RBA] in June is looking more likely than 40-50bp.”
The “super low” WA jobless rate would be familiar to many in that state as companies struggle to find and keep staff. April’s drop, though, was more to do with a lower participation rate than employers generating extra jobs, she said, adding that the lowering of border controls may keep a lid on wage gains even in the tight market.
Birch said the number of those working reduced hours due to illness was almost back to the January peak during the first Omicron wave, although that number was likely to fluctuate making it challenging to forecast its impact.
ACTU secretary Sally McManus said the low jobless rate had “done nothing” to stop the cut in real wages as salary increases failed to keep pace with prices.
“Australians are sick of waiting for wage growth that Prime Minister Scott Morrison keeps telling them would follow when unemployment was low,” McManus said. “Well, unemployment has been low for six months now and in every one of those months, workers’ wages have gone backwards in real terms.”
“We also have nearly 1 in 3 workers in insecure work,” she said. It’s hard to bargain for the pay increase when you don’t even know if you’ll get any hours tomorrow.”
Andrew McKellar, chief executive Australian Chamber of Commerce and Industry, though, said the low jobless rate meant the next federal government “must pull all the levers it can to address chronic skills shortages”.
“Businesses are facing acute labour constraints,” McKellar said. “The fall in the unemployment figures has coincided with the most severe workforce shortages in 48 years with job vacancy rates the highest since records began.”
“We must remove the barriers that prevent people, particularly aged pensioners and parents, from fully contributing to the economy,” he said, adding more subsidies were needed to support training for job seekers.
For males, the jobless rate eased to 4% from 4.2%, the lowest since October 2008. For females, the unemployment level remained at 3.7% for a second month in a row, the lowest since May 1974, the ABS said.
According to Westpac’s senior economist, Justin Smirk, the continuing decline of the rates of underemployment and underutilisation was the most significant sign of strength in the labour market. Both are at their lowest since 2008.
“We have found that underemployment, and underutilisation, to be better leading indicators for wages growth than unemployment,” Smirk said.
