Change to Australia’s unemployment rate
Australia’s unemployment rate has risen to 3.7 per cent in April, new figures out Thursday reveal, after employment decreased by 4300 people over the period.
In seasonally adjusted terms, it’s a slightly higher figure than the 3.5 per cent March figure and is higher than what the market – and the Reserve Bank – was predicting.
The 4300 jobs lost over the month is in stark contrast to the 25,000 in gains economists were predicting.
There was a decline of 27,100 full time positions.
The figures reveal the participation rate, or the percentage of people looking for work, has decreased to 66.7 per cent in seasonally adjusted terms.
Treasurer Jim Chalmers said it was “expected” the unemployment rate would rise “a little bit”.
“We are still talking about something like 330,000 new jobs created in the life of this Albanese government not yet one year old,” he said.
But he added the jobless rate was “still remarkably low given what has come at us from around the world”.
This month’s 2023-24 budget forecast the jobless rate would end the June quarter at about 3.5 per cent before gradually rising to 4.25 per cent by mid-2024 and 4.5 per cent a year later.
A prolonged higher-than-forecast jobless rate could chip into the government’s projected $4.2bn surplus.
The latest headline jobs figures come a day after Wage Price Index figures revealed pay packets increased 3.7 per cent over the 12 months to the March quarter.
Both sets of figures are set to be crucial when the Reserve Bank next meets to consider further hiking interest rates to tame inflation.
Inflation, which remains at 7 per cent, is still well above the Reserve Bank’s goal of 2-3 per cent.
Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said the data “at the margin” weakened the case for another rate hike.
“We expect to see a gradual softening in labour market conditions over 2023 as the impact of interest rate increases to date start to bite,” he said.
“Whether today’s data are the start of that process or just typical volatility will be a key question at the upcoming RBA meeting.
“At the margin, these data weaken the case … But the labour market remains very tight and is delivering strong wage growth, which means a June rate hike will still be a very close call.”
ABS head of labour statistics Bjorn Jarvis said the employment-to-population ratio fell 0.2 percentage points to 64.2 per cent.
“Even with those falls, both indicators were still well above pre-Covid-19 pandemic levels and close to their historical highs in 2002,” he said.