AUS
NZ
UK
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Summary
- The unemployment rate recovered faster than expected to reach 6.4% during the month of January.
- There were 29,100 additional jobs created during January, contrary to the expected bump of 40,000.
- Victoria recorded the highest one-month increase in the number of employed persons by 1.3%, followed by 1.2% rise in Tasmania.
The Australian Bureau of Statistics (ABS) today released its latest data on Labour Force for the month of January 2021. The unemployment rate decreased to 6.4% in January 2021, down from its December value of 6.6%, going lower than the expected rate of 6.5% for the month. The drop was of 2 basis points from the December unemployment rate of 6.6%.
What this meant for the workforce was a decrease of 34,300 unemployed people to reach an unemployment level of 877,600 persons during the month. The monthly labour force survey reveals that employment increased by 29,100 people to reach 12,939,900 people.
The 29,100 additional jobs created in January were no match for the expected addition of 40,000 persons to the employed segment. This was a huge let down from the December growth of 50,000 in the number of jobs. However, full time employment increased by 59,000 while part-time employment decreased by 29,800.
The number of hours worked decreased by 86 million hours to 1,667 million hours while the participation rate decreased by 0.1 pts to 66.1% during the month.
Expectations Remain Optimistic
The Australian economy has gained from a host of factors, one of the prime factors being the fiscal stimulus package. The RBA announced an extension to fiscal stimulus package by an additional AUD100 billion earlier this month.
Under these changes, the expectations remain positive for the Australian economy’s outlook. The central bank had forecasted that the economy would grow 3.5% over 2021 as well as over 2022 and the jobless rate would decline to 6% by the end of this year and to 5.5% by the end of 2022.
However, the interest rates are not expected to change anytime soon as the RBA stated that the inflation rate target of 2-3% needs to be achieved first. The RBA also stated that this could take at 2-3 years, hinting at interest rates remaining low till 2024.
The RBA launched various programs including tax rate cuts, incentives for investments by firms, Job creation programs as well as infrastructure projects to boost activity.
Victoria Leading the Way
Employment growth across states remained varied with many states showing a decrease in employment. However, Victoria visibly absorbed a large chunk of the increased workforce in the population.
The monthly change in the employed people was highest in Victoria at 1.3%, followed closely by Tasmania at 1.2% and Northern Territory at 1.1%. Both Victoria and Northern Territory hold a high employment to population ratio of 62.4% and 69.3% respectively, considerably higher than the Tasmanian ratio of 57.4%.
Despite continuing lockdowns and re-instating of social distancing restrictions, the Australian economy has performed better than expected. However, the restrictions have taken a toll on Sydney and Melbourne which led to zero monthly growth in employment in New South Wales.
