Unemployment remains low despite drop in jobs in Australia
In December, Australian employment unexpectedly declined following an outsized gain the month prior, a sign that the labour market might be cooling, although the unemployment rate remained near five-decade lows.
According to the Australian Bureau of Statistics (ABS), net employment fell by 14,600 in December from November, when it surged by 58,200, and missed forecasts for an increase of 22,500. On the other hand, it is positive to note that the unemployment rate held at 3.5%, just above the 48-year low of 3.4%, while the participation rate dropped to 66.6% from a record high of 66.8% in November.
The total number of full-time jobs rose by 17,600 in December, while the total number of jobs added over the past year amounted to 452,000.
Lauren Ford, Head of Labour Statistics at the ABS, commented, “The strong employment growth through 2022, along with high participation and low unemployment, continues to reflect a tight labour market.”
Increasing employment leads to higher purchasing power, and with vacancies at historically high levels, demand for labour remains healthy. As a result of this demand, wages are rising, and the supply of workers is increasing due to the return of migrants after Australia’s borders were opened early last year.
ABS data further revealed that net temporary arrivals increased by 180,000 between July and November, the largest five-month increase on record. These include skilled migrants, temporary workers and students. In the face of such large inflows, the Australian government’s net migrant target of 235,000 for 2022/23 now appears likely to be exceeded, reported Reuters.