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Labour Force figures for September have shown the unemployment rate remaining at 4.1 per cent (seasonally adjusted), according to the Australian Bureau of Statistics (ABS).
Between August and September, 64,100 more people entered employment (an increase of 0.4 per cent), rising from 14,457,800 to 14,521,900, while the number of unemployed people fell by 9,200 (down 1.5 per cent), from 624,900 to 615,700.
Bjorn Jarvis, ABS head of labour statistics, said: “With employment rising by around 64,000 people and the number of unemployed falling around 9,000, the unemployment rate remained at 4.1 per cent, where it has generally been over the past six months.”
The participation rate reached a record high once again, rising by 0.1 percentage point to 67.2 per cent, despite the fall in the number of unemployed people.
“Employment has risen by 3.1 per cent in the past year, growing faster than the civilian population growth of 2.5 per cent. This has contributed to the increase in the employment-to-population ratio by 0.1 percentage point, and 0.4 percentage points over the past year, to a new historical high of 64.4 per cent,” Jarvis said.
“The record employment-to-population ratio and participation rate shows that there are still large numbers of people entering the labour force and finding work in a range of industries, as job vacancies continue to remain above pre-pandemic levels.”
He said while the number of unemployed people fell during the month, the year-on-year figures showed an increase of 90,100 (or 17.2 per cent) of unemployed individuals since September 2023.
“Despite this rise over the last year, there are still around 93,000 fewer unemployed people than there were just before the start of the COVID-19 pandemic, when the unemployment rate was at 5.2 per cent,” Jarvis said.
Reacting to the data, ANZ head of Australian economics Adam Boyton said the strength in employment presents “a degree of tension with the ongoing soft pace of GDP growth”.
“While hours worked had been running softer than employment growth, hours worked is now recorded as being up 2.4 per cent y/y,” he said.
“That implies either a pick-up in GDP growth in the September quarter or a continuation of Australia’s weak productivity performance. Based on what we know about 3Q24 so far, the latter appears more likely than the former.”
In terms of what this means for the RBA, Boyton said: “Helpfully for the Reserve Bank, the impressive increase in participation suggests that the supply side of the labour market continues to adjust.
“In turn that means the balance of labour demand and supply, the unemployment rate, has moved a little higher over the past six months. Our preferred measure of labour market tightness also remains at levels consistent with inflation ultimately returning to the RBA’s 2–3 per cent target band.”
However, the robustness in employment growth has removed any urgency for near-term rate cuts, according to Boyton, as the various indicators of labour market tightness the RBA observes pointed to a still tight labour market, meaning the “RBA Board is unlikely to see any urgency to cut rates in the near term.”
“We continue to see the first easing in February 2025, although achieving a rate cut on that time frame will likely require a broader easing in labour market conditions (which we still expect),” he said.
[RELATED: RBA weighs out considerations for hike or cut]
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