Unemployment at its highest in 2 years

The latest data from market research company Roy Morgan outlined how unemployment in Australia is at its highest since March 2021.

Australian unemployment rose 1.4 per cent in January, which now puts the figure at 10.7 per cent. That’s an increase of 223,000 people for the month, bringing the total to 1.61 million Australians.

Roy Morgan chief executive Michele Levine said these figures are at the highest since the end of the JobKeeper payments in March 2021.

“The significant decline in part-time jobs led to the usual increase in the under-employment rate in January … Of concern is that over 3 million Australians are now either unemployed or under-employed – the highest combined figure for two years since February 2021 near the end of the JobKeeper employment subsidy,” she said.

Meanwhile, underemployment, which is the underuse of a worker in a position, rose by 65,000, bringing the total to 1.43 million. This is 9.5 per cent of the workforce. Together, both unemployment and underemployment make up 20.2 per cent of the workforce as of January.

“Despite the complaints from some sectors [that] can’t find enough people to work in their industries, there continues to be a large pool of millions of Australians who are looking for work or looking for more work,” said Ms Levine.

“This larger pool of potential workers than is usually considered has also been covered in the annual ABS Annual ‘Potential workers’ release – last released in May 2022.”

While full-time employment increased, it was part-time employment that saw a dramatic increase. Roy Morgan said in a statement that this is usual for the month of January, as the Christmas rush dies down and less staff are needed in retail stores.

Ms Levine continued: “The usual seasonal trends were seen in January as part-time employment dropped after the pre-Christmas retailing season, down 280,000 to 4,517,000, while full-time employment increased, up 130,000 to 4,797,000.

“Both of these trends are usually observed during the new year period as part-time retailing jobs dry up and people begin new full-time jobs to start the year.”

The pandemic may have played a part in the data, as pre-COVID-19 had 850,000 fewer people unemployed. However, there are still 500,000 more people in the workforce now than before the pandemic, as workforce reached its largest-ever pool of workers, hitting 15 million in January.

Ms Levine said in a statement that the government should have the consumer price index (CPI) in mind when determining policy, as it will play a key role in future unemployment data.

“The latest ABS CPI figures released in late January show official annual inflation in Australia reaching a 32-year high of 7.8 per cent in the December quarter 2022 … The [Reserve Bank of Australia] has also indicated it intends to continue increasing interest rates – at least for the next two months – as it attempts to bring inflation under control,” Ms Levine explained.

“This confluence of official CPI figures, RBA meeting and federal budget will be pivotal in determining the course of the Australian economy over the next few years. The Albanese government and other policymakers must keep at the forefront of their thoughts the millions of Australians looking for work or looking for more work and who are the most likely Australians to be struggling with the challenges of high inflation and the rising cost of living.”