Australian labour market – mixed signals but probably still in a weakening phase

Last month’s Labour Force data release for April 2024, revealed that the Australian labour market was starting to weaken in the face of the fiscal squeeze (the government announced a second successive annual fiscal surplus on Tuesday) and the 11 interest rate hikes since May 2022. Today (May 16, 2024), the Australian Bureau of Statistics released the latest – Labour Force, Australia – for April 2024, which shows that there are mixed signals which make it hard to say categorically where things are or where they are going. Total employment growth was positive and the participation rate increased, which usually signals a strengthening labour market. But full-time employment fell and monthly hours worked were static. Further both the unemployment rate and the underemployment rate rose, which indicates weakness, notwithstanding the fact that the participation rate increase accounted for some of the rise in unemployment. Moreover, there is now 10.8 per cent of the working age population (1.58 million people) who are available and willing but cannot find enough work – either unemployed or underemployed and that proportion is increasing. Australia is not near full employment despite the claims by the mainstream commentators and it is hard to characterise this as a ‘tight’ labour market.

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