Unemployment rate remains stagnant at 4.2%
August saw the unemployment rate hold steady at 4.2 per cent while the participation rate remained at a record high, according to recent Australian Bureau of Statistics data.
The Australian Bureau of Statistics (ABS) has revealed the unemployment rate has remained stagnant at 4.2 per cent and the participation rate remained at 67.1 per cent during August.
According to industry professionals, these results reaffirm the unlikely expectation of rate cuts from the RBA and remain in line with the unemployment forecasts.
ABS head of labour statistics Kate Lamb said the steady rate was impacted by both a rise and fall in the number of unemployed and employed people.
“The number of unemployed people fell by around 10,000, while the number of employed people grew by around 47,000, in August,” Lamb said.
“This resulted in the unemployment rate remaining steady at 4.2 per cent and the participation remaining at its record high of 67.1 per cent.”
According to the data, the growth in employment increased the employment-to-population ratio by 0.1 percentage points to 64.3 per cent.
This is just below the November 2023 historical high of 64.4 per cent.
Lamb said this rise in the employment-to-population ratio was underpinned by an increase in the employment-to-population ratio for men, which rose by 0.2 per cent to 68.1 per cent.
The measure stayed at the near historical high of 60.6 per cent for women.
Notably within the data, it was also highlighted the underemployment rate rose by 0.1 percentage point to 6.5 per cent which is still slightly lower than this time last year.
In addition, the underutilisation rate almost remained steady at 10.6 per cent which measures well below the 13.9 per cent recorded pre-COVID-19.
BDO economics partner Anders Magnusson said the data release tells a “nuanced story” of the current economic landscape.
“The labour market continues to soften in line with the RBA’s December quarter forecasts, with underemployment slowly increasing while job vacancies have been declining and the number of Australians holding multiple jobs has been decreasing,” Magnusson said.
“The record high participation rate is a notable highlight.”
“The dynamics of the post-COVID world are contributing to this through increased workplace flexibility and more people, especially women, securing full-time employment.”
The ABS data demonstrating the rise in the employment-to-population ratio and the participation rate is a clear indication that there are still large numbers of people entering the labour force and finding work.
CreditorWatch chief economist Anneke Thompson said the steady unemployment rates are a source of hope for the RBA.
“This is good news for the RBA, who remains hopeful that its monetary policy tightening measures does not lift the unemployment rate beyond its forecasts, which is 4.3 per cent by December 2024 and 4.4 per cent by March 2025,” Thompson said.
Seasonally adjusted monthly hours worked rose by 0.4 per cent, slightly stronger than the 0.3 per cent rise in employment.
Lamb said there is still tension within the labour market.
“The proportion of people working reduced hours because they were sick continues to be above pre-pandemic levels,” she said.
“However, the proportion of people working less hours than usual due to economic reasons, such as work or less work available, is below pre-pandemic levels, which points to continued relative tightness in the labour market.”
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