According to new figures from the Australian Bureau of Statistics (ABS), Australia’s unemployment rate has dropped to 4.8 percent, with just under 30,000 jobs being created in the month of June 2021.
These figures indicate that the nation’s unemployment rate has now declined for eight consecutive months, taking the unemployment rate to its lowest level in a decade.
Although the unemployment rate dropped from 5.1 to 4.9 percent in June, the underemployment rate jumped half a percentage point to 7.9 percent during the same month.
The increase in underemployment derived from a 1.8 percent decline in hours worked last month, which means 33 million fewer hours were worked across the economy.
This drop is mainly the result of the impact from Victoria’s most recent snap lockdown, which occurred during the period this survey was conducted.
Australia’s labour market has maintained exceptionally strong momentum for the past few months, however things have taken a dramatic turn as a consequence of the ongoing lockdown in Greater Sydney and also with covid-19 beginning to spread in Victoria again.
The full impact of the lockdowns will be captured in the labour force surveys from July and August.
The lockdown in Greater Sydney has significantly increased the level of uncertainty over economic outcomes in the near term.
A lockdown that goes on for several weeks could result in a significant number of workers in NSW being stood down. Based on what happened in April and May 2020, employment could fall by 200,000 and unemployment may increase by 50,000 in the upcoming months.
Employment data shows the economic recovery had strong momentum before the NSW outbreak.
However, the impact of Victoria’s lockdown in late May and early June shows that the number of hours worked fell 1.8 percent as a result of the governments stay-at-home orders.
For Victoria specifically, the two-week lockdown led to an 8.4 percent decrease in hours worked between May and June, but thankfully employment in the state only declined by 0.3 percent month-on-month.
This illustrates that the majority of employers retained their workforce through the lockdown and were able to snapback and re-open when restrictions were eased.
During the month of June 2021, the participation rate which measures people aged 15 and over either in work or looking for it, remained stable at 66.2 percent.
The size of the labour force during June 2021 only increased by 7,000 people, these lower than expected rates are mainly a result of the border closures which are currently restricting immigration.
With the participation rate remaining steady, that helped the unemployment rate to decline to 4.9 percent.
Due to the assumption that international borders will remain closed until at least the end of the year, labour force growth will remain muted, so even small employment gains will result in a further decline in the unemployment rate.
The upshot is that wage growth should start to accelerate in earnest before long, prompting the Reserve Bank to tighten policy by early-2023.
According to the recently published ABS data, there are now 13,154,200 people employed in Australia. This is up 29,100 in the space of a month.
Full-time employment increased in Australia by 51,600, to 9,016,800 people.
Part-time employment decreased by 22,500, to 4,137,400 people. The part-time share of employment is currently 31.5 percent.
The underemployment rate increased from 7.4 percent to 7.9 percent, largely because of the lockdowns in Victoria. This resulted in the underutilisation rate, which combines unemployment with underemployment, increasing by 0.3 percentage points to 12.8 percent.
The figures truly show the resilience of Australia’s economy. It is incredible to think that in June 2021 Australia had its tightest labour market in a decade a year after its first recession in three decades.
1 In 3 Australians Are Currently Looking For A Career Change
Some of the reason’s workers were keen to look for new positions of employment included; a lack of promotional opportunities at 43 percent and an uncompetitive salary at 39 percent.
In comparison only, 46 percent of respondents admitted that they were satisfied with their current position of employment. 49 percent and 55 per cent of workers reported feeling satisfied with their current employer and direct manager, respectively.
As the new financial year quickly approaches us, often at this time of year traditionally there is fresh activity occurring in the jobs market as new budgets are set and employers look to add to their headcount.
The End of Financial Year similar to the start of the new year is also a seasonal peak time of the year for people to review whether they should stay or change jobs.
For employers, this impending movement of people will add to their staff retention challenges, which are already heightened in response to a gap in salary increase expectations between organisations and their employees.
As a direct consequence of the covid-19 pandemic a large number of professionals feel that their career stagnated over the past 12 months. They put their career plans on hold to help their organisation through the crisis and recover. As Australia recovers from the covid-19 pandemic employees are now starting to focus on their own individual desires as a worker and are once again beginning to prioritise professional growth and the advancement of their career.