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ABS monthly job figures show lockdowns slash hours worked, unemployed giving up

Rebecca Le MayNCA NewsWire
Australia’s unemployment rate has fallen again. Joel Carrett / NCA NewsWire
Camera IconAustralia’s unemployment rate has fallen again. Joel Carrett / NCA NewsWire Credit: News Corp Australia

Australia’s unemployment rate fell again last month, reflecting a plunge in the participation rate largely due to the protracted lockdown in NSW, rather than a strengthening labour force.

The jobless rate slid to 4.5 per cent in August, down from 4.6 per cent for the previous month, while the participation rate weakened by 0.8 percentage points to 65.2 per cent.

It follows a 0.2 percentage point fall in the participation rate in July and shows many Australians are dropping out of the jobs market.

CommSec chief economist Craig James said those who weren’t actively looking for work, but technically classed as neither employed or unemployed, “were effectively in hibernation”.

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For those who did have work, hours decreased by 3.7 per cent in August, considerably more than the 1.1 per cent fall in employment.

This figure highlighted the extent to which people who endured new or continuing lockdowns had reduced hours or no work without necessarily losing their jobs, the Australian Bureau of Statistics said on Thursday.

ABS head of labour statistics Bjorn Jarvis said the relatively large fall in unemployment accounted for about 13 per cent of the 168,000-person fall in the total labour force.

Centrelink
Camera IconHours worked in NSW plunged by 13 per cent between June and August. Jane Dempster/The Australian. Credit: News Corp Australia

“The fall in the unemployment rate reflects a large fall in participation during the recent lockdowns rather than a strengthening in labour market conditions,” Mr Jarvis said.

“Throughout the pandemic we have seen large falls in participation during lockdowns – a pattern repeated over the past few months.

“Beyond people losing their jobs, we have seen unemployed people drop out of the labour force, given how difficult it is to actively look for work and be available for work during lockdowns.”

Hours worked in Covid-hit NSW fell sharply by 13 per cent between June and August and by 7 per cent last month alone.

Unsurprisingly, other jurisdictions hit by lockdowns also recorded large falls in hours worked in August, down 3.4 per cent in Victoria, 5.3 per cent in Queensland and 2.5 per cent in the ACT.

“There are always some employed people who are temporarily working reduced hours or no hours in a given month, but the current wave of lockdowns has seen this become more common,” Mr Jarvis said.

“Compared with August 2019, there was an extra 1.2 million employed people who worked reduced hours for economic and other reasons in August 2021, including 532,000 who worked no hours for those reasons.”

COVID SYDNEY
Camera IconGreater Sydney was in lockdown for the whole of last month, with other parts of NSW in lockdown from early August. Damian Shaw / NCA NewsWire Credit: News Corp Australia

Mr James said government assistance payments had been important in helping people cope with the dislocation and hold onto their jobs.

Job ads and consumer confidence were holding up a lot better than during the lockdowns that occurred in the first half of 2020, he said.

“That’s because the focus is on the new end-game being the vaccination route to ‘freedom’,” Mr James said.

“Job ads haven’t plummeted because the focus has been on businesses wanting their staff back at work and workers wanting to go back to work.

“The quicker that vax rates lift, the quicker some normality can return, and the quicker that economies bounce back.

“The longer that people are not working, the harder it will be to get the job market and the economy back to pre-Delta or even pre-Covid days.”

Covid Melbourne
Camera IconVictoria was recovering from an earlier lockdown when it went back into lockdown from August 5, but restrictions eased in regional Victoria from August 10. Ian Currie / NCA NewsWire Credit: News Corp Australia

Outside of Australia’s virus-hit jurisdictions, job markets remained tight – a clear result of state and foreign border closures, Mr James said.

Before being briefed on the jobs data in detail, Prime Minister Scott Morrison noted, “We don’t have large numbers of people immigrating to Australia at the moment. Even today on the workforce numbers that we have … that shows we are going to need people in building jobs, in construction jobs,” Mr Morrison said.

ABS figures also released on Thursday showed international border closures had resulted in Australia’s population growth slowing to a near standstill in the year to March.

The nation’s population grew by just over 0.1 per cent or 35,700 people to 25.7 million, in contrast to a 1.5 per cent growth in the 2019 calendar year.

Population growth over the past 12 months was entirely due to 131,000 births, while net overseas migration fell by 95,300 – for the first time since 1946.

Unemployment Figures

Originally published as ABS monthly job figures show lockdowns slash hours worked, unemployed giving up

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