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Highlights
- The latest data from the ABS suggests a slowdown in payroll jobs growth in early November.
- The payroll jobs recovery decelerated following strong growth in the second half of October.
- It remains to be seen if the new Omicron variant will derail labour market recovery from the pandemic.
The Australian labour market has certainly borne the heavy brunt of the lockdowns imposed during the spread of the Delta variant. The recently released data from the Australian Bureau of Statistics (ABS) suggests that the country lost 378,000 filled jobs during the September quarter. These filled jobs comprised 70,000 secondary jobs and 308,000 main jobs. The recent data has emerged amid changing market conditions when the labour market is facing a possible threat from the new Omicron variant.
The data indicating a slowing labour market did not come as a surprise as the impact of the Delta-variant induced lockdowns was also felt in other economic indicators during the last quarter. Earlier this month, the ABS reported that Australia’s GDP contracted by 1.9% during the September quarter. In a way, the decline in jobs could have been a crucial factor in decelerating the pace of the economic recovery.
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Slow recovery in payroll jobs
The data on filled jobs was followed by the rollout of weekly payroll jobs numbers for the fortnight ending 13 November. According to the ABS, payroll jobs increased by 0.2% during the 15-day period. The surge in payroll jobs was much smaller than the increase of 1.5% during the previous fortnight.
Notably, the impact of lockdowns was also visible in the initial days of November, which marked the last few days of the domestic border closures in Australia. On the other hand, total wages showed no change during the 15-day period till 13 November. However, wages demonstrated an increase of 0.8% over a month’s time since 16 October 2021.
Which sectors took a hit?
The accommodation and food services industry saw the largest fall in the number of filled jobs due to the Delta variant and trading restrictions. The sector saw a decline of 143,000 filled jobs and the sharpest fall in hours worked of 30.6%. Additionally, the arts and recreation sector observed a decline of 12.9% in filled jobs, which was largest in proportional terms.
Notably, the financial and insurance services sector, which was the only industry to observe rising jobs during the June 2020 quarter, also witnessed a fall in filled job positions during the September quarter. The recent data suggests that the labour market is caught in a turbulent string of forces that may hamper any growth for some more time to come.
With rising concerns surrounding the Omicron variant, it is worth questioning when the labour market could get back on track. After the impact of the first wave had dampened out, rising employment was one of the early signs of economic recovery. Some improvement in labour market revival can be expected in the months ahead, especially as the Australian Chamber of Commerce and Industry has plans to encourage the older workforce back into the market.
Operating on the same lines, the Australian Chamber of Commerce and Industry intends to increase the threshold on the work bonus scheme. The scheme allows a pensioner to earn an average of AU$480 a fortnight.
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