The unemployment rate in Australia has experienced a slight increase, rising by 0.1 percentage point to reach 3.7 per cent in April, according to the latest data released by the Australian Bureau of Statistics (ABS).
The ABS head of labour statistics, Bjorn Jarvis, highlighted that the rise in unemployment was driven by a drop in employment by approximately 4,000 individuals, coupled with an increase of 18,000 in the number of unemployed individuals.
Jarvis noted that the small decline in employment followed a monthly average increase of around 39,000 people during the first quarter of the year.
Additionally, the employment-to-population ratio saw a decrease of 0.2 percentage points, settling at 64.2 per cent, while the participation rate dipped by 0.1 percentage point to 66.7 per cent.
Despite these declines, Jarvis emphasized that both indicators remained significantly higher than pre-COVID-19 pandemic levels and were in close proximity to their historical highs in 2022.
In terms of hours worked, there was a notable increase of 2.6 per cent in monthly hours worked in April, which Jarvis attributed to fewer people working reduced hours during the Easter period.
Comparing this to the last time Easter coincided with the survey period in 2015, he mentioned that around 55 per cent of employed individuals worked fewer hours than usual, whereas in 2015 it was around 60 per cent.
This shift could be attributed to individuals taking their leave at different times or the impact of a high number of reported job vacancies.
Jarvis highlighted that the ongoing strength in hours worked over the past six months indicates that the demand for labor is, to some extent, being met by individuals working more hours.
Regarding underemployment and underutilization, the underemployment rate experienced a 0.1 percentage point decrease to 6.1 per cent (seasonally adjusted) following a 0.4 percentage point increase in March.
Jarvis mentioned that the underemployment rate remains low compared to historic levels, around 2.6 percentage points lower than before the pandemic, driven by faster growth in hours worked compared to employment.
The underutilization rate, which combines the unemployment and underemployment rates, saw a slight increase to 9.8 per cent but remained 4.2 percentage points lower than in March 2020.
Analyzing the underlying trend data, the monthly increase in trend employment surpassed the average monthly increase for the 20 years before the pandemic.
Jarvis noted that the trend data indicates stronger growth in hours worked relative to employment. In trend terms, hours worked increased by approximately 0.4 per cent, double the longer-term average of 0.2 per cent and double the growth rate in employment, which stood at 0.2 per cent.
The trend unemployment rate remained steady at 3.6 per cent for the third consecutive month after a slight revision in earlier data. Likewise, the trend underemployment rate remained unchanged at 6.1 per cent for the fourth consecutive month. The trend participation rate showed stability at 66.7 per cent over the past year, while the trend employment-to-population ratio experienced a marginal decrease of less than 0.1 percentage point, settling at 64.2 per cent.
Jarvis concluded that in trend terms, the strong growth in hours worked, high employment-to-population ratio, and participation rate, along with low unemployment and underemployment rates, all point to a tight labor market.
Further details, including regional labor market information, will be available in the upcoming April 2023 issue of Labour Force, Australia.
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