Unemployment up to 4.1%: ABS

The latest Labour Force figures released by the Australian Bureau of Statistics (ABS) have shown a lift in the unemployment rate by 0.2 percentage points to 4.1 per cent (seasonally adjusted) in April, up from a revised 3.9 per cent in March.

The number of employed people increased by 38,500 from March to April to 14,300,000, while the number of people entering unemployment increased by 30,300 to 604,200.

Meanwhile, the participation rate increased slightly by 0.1 percentage points, from 66.6 per cent in March to 66.7 per cent in April.

ABS head of labour statistics Bjorn Jarvis said the increase in unemployment reflected more people without jobs available and looking for work, as well as “more people than usual” saying they had a job that they were waiting to start in.

“The employment-to-population ratio remained steady at 64.0 per cent in April, indicating that recent employment growth is broadly keeping pace with population growth,” Jarvis said.

“This suggests that the labour market remains tight, though less tight than late 2022 and early 2023.”

ANZ head of Australian economics Adam Boyton noted no change in monthly hours worked, which remained at 1,962 million.

“Over the past 25 years larger year-on-year falls in hours worked have only been seen during the pandemic, the GFC and the early 2000s mid-cycle slowdown,” Boyton said.

“The Reserve Bank of Australia (RBA) is, in our view, likely underestimating the degree of labour market easing given a limited focus on hours worked across its suite of labour market indicators.”

He said that this dataset does not change ANZ’s view of a first rate cut to occur in November.

“We also expect only a very modest easing cycle of three 25-bps rate cuts in total,” Boyton said.

Commonwealth Bank of Australia’s (CBA) senior economist Belinda Allen said a number of indicators “now suggest the labour market is loosening”.

“Seek data shows job ads falling and the number of applications per job lifting. [The WPI] data indicated a step down in the pace of wages growth and … gives us more confidence that labour demand is easing,” Allen said.

Similarly, Allen said that these data points reinforce CBA’s stance that November will see the beginning of the RBA’s easing cycle, with fiscal policy remaining a risk.

Westpac economists Ryan Wells and Pat Bustamante said the extent to which labour demand will continue to cool over the near-term “will critically depend on the interplay between headcount and hours”.

“We continue to anticipate that conditions will gradually soften over the course of this year, as employment growth continues to soften and the unemployment rate ticks up to a quarter-average of 4.3 per cent by year end,” they said.

[RELATED: Wages growth past its peak: Economists]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

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