This despite 55,000 more people getting employed
The unemployment rate in October increased by 0.2 percentage points, reaching 3.7% in seasonally adjusted terms, new ABS figures showed.
Despite a growth in employment of 55,000 people, the surge in the number of unemployed people by 28,000 contributed to this uptick, bringing the rate back to levels observed in July and August.
Bjorn Jarvis (pictured above), ABS head of labour statistics, said the recent surge in employment followed a smaller increase in September. Over the past two months, the average employment growth of approximately 31,000 people a month slightly trailed the average growth since October 2022.
Key labour market indicators
The employment-to-population ratio increased by 0.1 ppt to 64.5%, and the participation rate also climbed 0.2 ppt to 67.0%.
Monthly hours worked rose by 0.5% in October, aligning with the 0.4% growth in employment. However, the annual growth rate in hours worked declined to 1.7%, down from around 5% earlier in the year and from the annual employment growth of 3%.
"Compared with the labour market just before the start of the COVID-19 pandemic, the growth in hours worked was still greater than employment, at 10% and 9.2%,” Jarvis said.
“However, the gap between them had recently narrowed, having been much higher for most of the period from October 2022 to August 2023. The recent slowdown in the growth of hours worked may suggest that the labour market is starting to slow, following a particularly strong period of growth.”
Looking at underemployment, the rate held steady at 6.3% in October, in line with the updated figure for September. The underutilisation rate, which combined unemployment and underemployment rates, was up 0.1 ppt to 10%.
Underlying trend data
Trend data for October revealed a steady unemployment rate of 3.7%, while employment grew by 0.2% (around 28,000 people). Hours worked dropped 0.1% in trend terms. Over the past year, employment lifted by 2.8%, while hours worked grew by 2.6%.
“In trend terms, growth in hours worked has also been slowing down recently, and has now fallen for the past four months,” Jarvis said. “This suggests a softening in labour demand, compared with the strong growth in hours during 2022-23.
“This slowing in hours is also reflected in the compositional change in employment growth, with part-time employment rising faster since the middle of 2023. In contrast, full-time employment had been increasing steadily through to mid-2023 but has seen very little growth since.”
The employment-to-population ratio held steady at 64.4%, maintaining a range between 64.4% and 64.5% over the last 16 months. Meanwhile, the participation rate experienced a slight decline from 66.9% to 66.8%, remaining consistent with the levels observed in the preceding nine months.
“The relatively high level of the employment-to-population ratio and participation rate shows the ongoing resilience in the labour market, with growth in employment broadly in line with population growth,” Jarvis said in a media release.
The underemployment rate stayed at 6.4% for a fifth consecutive month.
Read Labour Force, Australia, October 2023.
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