Jobs market ‘very resilient’ as unemployment falls to 3.9%
The latest ABS data shows the labour market is defying a period of high interest rates, according to economists.
The labour market is proving “very resilient” despite an extended period of high interest rates, economists have said, with the unemployment rate having fallen to 3.9 per cent last month.
The economy also added 36,000 jobs in November, coming in above estimates for a 25,000 increase, according to the latest data from the Australian Bureau of Statistics (ABS).
Head of labour statistics David Taylor said the employment, combined with a 27,000 decrease in unemployed people, caused the jobless rate to fall 0.2 per cent.
“In November we saw a higher than usual number of people moving into employment who were unemployed and waiting to start work in October,” Taylor said.
“This contributed to the rise in employment and fall in unemployment.”
Job gains were concentrated in full-time positions (+53,000) while part-time jobs declined by 17,000.
The participation rate also fell by 0.1 per cent to 67.0 per cent, down from a historic high of 67.1 per cent in September.
“Despite the fall, the participation rate was the same as a year ago, and 1.5 percentage points higher than March 2020,” Taylor said.
The employment-to-population ratio rose marginally to 64.4 per cent, equal to the level a year ago and 2.2 per cent above its pre-pandemic level.
“The recent growth in population has boosted the labour supply as employment has kept up with population growth,” he said.
The underemployment rate remained at 6.2 per cent.
In trend terms, the unemployment rate was steady at 4.0 per cent and the underutilisation rate also held at 10.2 per cent.
“Compared with outcomes before the COVID-19 pandemic, the unemployment and underemployment measures are still low, while trend employment and participation measures are around all-time highs. This suggests the labour market continues to be relatively tight,” Taylor said.
AMP economist My Bui said it was clear the labour market was “still very resilient despite an extended period of restrictive rates”.
“The unemployment rate, which is the most balanced way to judge both labour supply and demand, ticked down to just 3.9 per cent.”
BDO economics partner Anders Magnusson said the robust labour market was unlikely to delay rate cuts since the inflation risk was minimal.
“There is minimal risk of inflation fuelled by the labour market and the RBA safely retains its intended wins from near-full employment, yet the standard of living for many Australians is declining,” he said.
The labour market’s growth was largely offset by the weak economy and low productivity levels, Magnusson added.
“This labour market strength would typically occur alongside strong growth, but Australia’s productivity slowdown is preventing real and sustainable wage growth and improved living standards.”
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