In September month, Australia’s unemployment rate decreased to its lowest since 2012. As per the Australian Bureau of Statistics (ABS) the unemployment rate dropped from 5.3 percent to 5.0 percent. However, the Net employment increased just by 5,600 persons in the month of September, which is below the expected 15,000 persons. In September 2018, trend employment increased by around 26,000 and the full employment increased by 21,000 persons.
The entire fall in the unemployment was mainly due to sharp decline in the number of people actively looking for work. As per ABS, the underemployment held steady at 8.3 percent which is still unusually high and the structural forces that have restrained wage growth in all major economies aren’t going to disappear.
The full-time jobs increased by 20,300 and part time employment reduced by 14,700. The participation rate decreased from 65.7 percent to 65.4 percent. Over the year 100,000 jobs were created for young people and in terms of the participation rate, more women and more seniors are in the workforce. New South wales and Victoria showed strongest annual growth in trend employment as they are the only states and territories which have recorded a year-on-year growth above their 20-year averages.
Some economists are expecting that the unemployment rate may bounce back over the remainder of the year as these employment rates are highly volatile. The fall in the unemployment rate and the Continuous growth in total hours worked will benefit consumers through higher aggregate household income, as well as boosting consumer sentiment. Over the past 12 months, over 280,000 jobs have been created in Australia. Due to decline in the participation rate and sampling rotation by the Australian Bureau of Statistics, the unemployment rates were down in September. Further, due to the healthy increase in the full-time jobs, the labour conditions are solid in Australia.
Federal Treasurer Mr. Josh Frydenberg said the decrease in the unemployment rate is something to celebrate. He also added that the increase in the full-time employment by 20,000 is consistent with the momentum that they are observing in the economy.
In terms of the participation rate, more women and more seniors are in the workforce and over the year we have seen another 100,000 jobs created for young people. While it is expected that the wage pressures will pick up gradually, the Australian consumers are facing substantial headwinds driven by the ongoing housing market correction and extremely low savings rate.
The September data of the Australian Bureau of Statistics (ABS) showed that the participation rate decreased from 65.7 percent in August to 65.4 percent in September. As per the AMP Capital chief economist Shane Oliver, unemployment rate to 5.0 per cent is unlikely to be sustained in October and the large amount of labour market slack means wage inflation pressures will remain weak. After the release of this news the Australian dollar moved up to $0.7121.
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