Australia’s unemployment rate fell unexpectedly from 5.8 per cent to 5.6 per cent last month, helped by a decline in workforce participation and some modest job creation.
The number of people employed rose by 9,100 in September, seasonally adjusted, with growth in both full-time jobs (up 5,000) and part-time positions (up 4,100), according to the latest labour force figures from the Australian Bureau of Statistics.
The participation rate, which is the proportion of people in work or looking for work, fell to 64.9 per cent, the lowest level since November 2006.
While persistently weak job creation shows the labour market remains soft, ANZ head of Australian economics Justin Fabo says there are encouraging signs in other surveys of hiring intentions.
The good news in the data is that there was an estimated 9,100 jobs added to the economy and just over half of those were full-time, so that is positive.
But what’s taking the gloss off is that that’s not actually enough jobs to keep up with workforce growth.
We generally need around 15,000 jobs a month just to keep unemployment roughly steady, and so what happened is that the labour force actually shrank last month due to a fall in the number of people actively looking for work.
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“We’ve seen job ads and a couple of other measures just improve a tad in the last couple of months, and normally that would be consistent with at least a stabilisation in the unemployment rate,” Mr Fabo said.
Several economists say the continued decline in participation suggests people may be giving up the hunt for a job but Mr Fabo believes the ageing population may be hiding the true picture.
“A large part of reason for why it’s fallen is the ageing of the population,” he said.
“So when you strip out those people who are aged over 65 – and not many of them work – when you strip them out the participation rate’s actually increased a little bit over the past year.”
Around the country, unemployment dropped sharply in both South Australia (from 6.8 per cent to 6 per cent) and in Western Australia (from 5 per cent to 4.6 per cent). It also fell in New South Wales (from 5.9 per cent to 5.6 per cent).
The jobless rate rose in Victoria (5.8 per cent) and the ACT (to 4.1 per cent, in trend terms), and it held steady in Queensland (5.9 per cent), the Northern Territory (5.5 per cent) and in Tasmania (8.5 per cent in trend terms).