Australia’s unemployment rate dips to 5.6%, lowest rate since September 2013

From 5.7 percent in July, Australia’s unemployment rate further went down to 5.6 percent in August. It is the lowest joblessness rate since the Coalition government came to power in September 2013.

However, while only 3,900 jobs were lost in August, for the same month there was also a big reduction in the proportion of adults in work or looking for jobs. This caused the labour participation rate to dip to 64.7 percent from 64.9 percent in July, reports ABC.

The drop in number of people working was accompanied by a reduction of monthly hours workers by 3.9 million to 1,656 million hours, according to data from the Australian Bureau of Statistics (ABS). Jacqui Jones, programme manager of ABS Labour and Income Branch, explains, “Of the majority of the persons who were employed for the census, most already had another job, but worked more hours during the month.”

But Capital Economics points out the unemployment rate may have gone down because of the jobs provided by the census which boosted employment numbers by around 10,000. It believes the figure was skewed by the 49,000 people temporarily given jobs in August by the census.

Jones adds the shift toward part-time employment, particularly among males, continues. For Gareth Aird, economist of Commonwealth Bank, the figures do not indicate a record-low but record-high unemployment rate since it explains some underperforming aspects of the Australian economy. “This indicates that there is plenty of spare capacity in the labour market,” he says.

Dr Richard Holden, economics professor at University of New South Wales and author of Vital Signs weekly economic wrap in The Conversation, agrees with Aird that the unemployment data is not really good news since 3,900 jobs were lost in August compared to 25,300 gained in July. Since the unemployment rate “conflates those who can get jobs with those who have given up looking,” a drop could be bad news and the lack of employment growth in August is worrying.

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Source: Dukascopy TV