Australian labour market continues to improve but there are warning signs
The Australian Bureau of Statistics (ABS) released of the latest labour force data today (July 14, 2022) – Labour Force, Australia – for June 2022. The labour market improved in June following up the gains in May after several months of weakness. The robust full-time employment growth was a good sign as was the increasing participation rate. That particularly favoured the younger workers. The official unemployment rate fell to levels not seen since 1974 but the underlying (‘What-if’) unemployment rate is closer to 5.7 per cent rather than the official rate of 3.5 per cent. Underemployment rose sharply however and while unemployment fell by 54,300, those in part-time work who desired more hours rose by 49,700. In other words, the jobs growth was biased towards the lower end of the hours distribution. There are still 1350.9 thousand Australian workers without work in one way or another (officially unemployed or underemployed). The only reason the unemployment rate is so low is because the underlying population growth remains low after the border closures over the last two years. With Covid infection rates rising quickly, and already around 780,000 workers working few hours than usual because of sickness, stay tuned for a deterioration in the labour market in the coming months.