Australia’s jobless rate dips to 5.8% to pre-pandemic levels
Data from the Australian Bureau of Statistics (ABS) showed that the unemployment rate fell to 5.8% in February from a revised 6.3% in January.
The number of employed people rose by 88,700 in February, a big jump from the expected 30,000. The participation rate remained unchanged at 66.1%, in line with estimates.
“The strong employment growth this month saw employment rise above 13 million people, and was 4,000 people higher than March 2020,” said Bjorn Jarvis, head of labour statistics at the ABS.
The unemployment rate has now fallen below the Reserve Bank of Australia’s (RBA) year-end estimate, forming a V-shaped recovery as containment measures of the pandemic have boosted confidence and spurred household spending.
However, given that the government’s Jobkeeper wage subsidy is set to expire by the end of this month, there could be a pause in the decline.
Nevertheless, the labour market is expected to be able to absorb it. “The end of JobKeeper will present some headwinds for the outlook; some of the group of employees working less hours than usual could lose their jobs when the scheme comes to an end,” said Sarah Hunter, chief economist for BIS Oxford Economics. “But broadly speaking, the labour market continues to outperform and the recovery shouldn’t be derailed by the end of the scheme.”
The RBA expects the unemployment rate to hover around 6% by the end of this year and fall to 5.5% at the end of 2022. In a more optimistic outlook for unemployment, the rate would drop to 4.75% by the end of next year, according to Bloomberg