Australia’s jobless rate remained steady in November even as the economy added about 2,000 jobs a day, underscoring the tight conditions in the labour market.
The unemployment rate last month was 3.4% with employers taking on 64,000 extra positions, more than half of them full-time, the Australian Bureau of Statistics said on Thursday. Economists from the ANZ and CBA forecast the rate would remain at October’s 3.4% rate with a net increase of about 15,000 to 20,000 jobs.
Joblessness has been near 50-year lows for much of 2022 as a rebounding economy after the Covid restrictions were eased combined with fewer overseas students and other short-term visa holders to produce a tight labour market.
Australia's jobless was unchanged in November at 3.4%, the ABS said. pic.twitter.com/sPk12s70Ct
— @phannam@mastodon.green (@p_hannam) December 15, 2022
During the September quarter, a record one in 30 jobs were vacant compared with about half that ratio before the pandemic. The strength of the labour market will be monitored closely by the Reserve Bank of Australia as it watches for signs of a jump in wages that has so far failed to materialise for most sectors.
After eight rate rises in as many months, the RBA board is not scheduled to meet again until February. Prior to today’s jobs numbers, investors were split between predicting another 25 basis point rise to 3.35% or a pause for that next gathering. Most of the labour market figures were upbeat, particularly the increase in the participation rate by 0.2 percentage points to match a record 66.8% set earlier in 2022. Economists had tipped the rate would be unchanged.
“The participation rate increased by 0.2 percentage points to 66.8% November, returning to the record high we saw in June 2022,” the head of labour statistics at the ABS, Bjorn Jarvis, said. “It was 1.0 percentage point higher than before the pandemic.”
The recovery in those looking for work in Australia post-pandemic is in contrast to the US, where a lot more people have not returned to the labour market, which partly explains that country’s much faster wage growth with a similar jobless rate.
Australian women’s participation rate is also back to matching its historical high of June at 62.4%. For men, it was 71.3%.
The workforce swelled to 13.77 million people last month, seasonally adjusted, reaching its latest record. Unemployment and underemployment levels are at about two-thirds of the level they were at in March 2020 before the pandemic.
Rising Covid cases continued to drag on the economy, with those working fewer hours because of illness up by 50,000 last month to 520,000, about a third higher than would be typical for this time of year, the ABS said.
Monthly hours worked sank slightly to 1.9bn.
Australia's workforce keep nudging new highs, regaining the trajectory it had before the pandemic disruptions. (Source: ABS.) pic.twitter.com/cHBlBLUbX2
— @phannam@mastodon.green (@p_hannam) December 15, 2022
The treasurer, Jim Chalmers, welcomed the latest jobs figures, but said “Australia won’t be immune to the volatile global economic environment driving higher global inflation and slowing growth.”
EY’s senior economist, Paula Gadsby, said the labour market had maintained “its stellar performance”.
“The ongoing strength of the labour market was being reflected in the resilience of household consumption – as witnessed in last week’s national accounts – despite rising interest rates and cost of living,” Gadsby said. “There is minimal spare capacity in the labour market, and forward indicators suggest employment will slow.
“As households eventually pull back on spending, businesses will face heightened uncertainty and likely falls in demand, together with continued inflation and wage pressures.”
Ahead of the jobs data for November (and before the US Fed lifted interest rates again), investors were betting there was slightly less than 50:50 chance the RBA will hike its cash rate when it meets in February. They reckon there's only about another 50bp to go before the peak. pic.twitter.com/GAWEJDrImX
— @phannam@mastodon.green (@p_hannam) December 15, 2022
The chief economist with Beta Shares, David Bassanese, said the “bumper” jobs report argued against any pause in the RBA’s rate rise at its February rates meeting.
“Indeed, contrary to all the negativity around rising interest rates, the major story of 2022 has been the economy’s resilience to date in the face of interest rate hikes,” he said.
Among the states and territories, the ACT claimed bragging rights as the jurisdiction with the lowest unemployment rate. Last month it sank to 2.9% in trend terms from 3.1% in October, the ABS said. (Seasonally adjusted it was down to 2.5%.)
Most states held their own in trend terms, with New South Wales the lowest among the big states, remaining at a jobless rate of 3.2%, while Victoria’s edged 0.1 percentage points higher to 3.6%.
