Unemployment remains at 4.2%

The unemployment rate has remained at a three-year high, even though the participation rate remains at record highs, according to new ABS data.

In figures released this morning (Thursday, 19 September), the Australian Bureau of Statistics (ABS) reported that the unemployment rate held steady at 4.2 per cent in August after hitting that high mark one month ago and having risen to 4.1 per cent in July.

ABS head of labour statistics Kate Lamb said: “The number of unemployed people fell by around 10,000, while the number of employed people grew by around 47,000, in August.

“This resulted in the unemployment rate remaining steady at 4.2 per cent and the participation rate remaining at its record high of 67.1 per cent.

“The growth in employment increased the employment-to-population ratio by 0.1 percentage point to 64.3 per cent, which is just below the November 2023 historical high of 64.4 per cent.

“This rise in the employment-to-population ratio was underpinned by an increase in the employment-to-population ratio for men, which rose by 0.2 per cent to 68.1 per cent, while the measure stayed at the near historical high of 60.6 per cent for women.”

“While the number of unemployed people fell slightly to 627,000 in August, it has risen by around 45,000 people since the end of 2023.”

In trend terms, the ABS detailed, employment grew by around 40,000 people (0.3 per cent), which was faster than the 20-year pre-pandemic average (0.2 per cent), but the trend unemployment rate remained steady at 4.1 per cent for August.

In that month, hours worked grew 0.2 per cent, which was slightly slower than the growth in employment.

Further, the underemployment rate remained at 6.4 per cent, and the unemployment rate stayed at 4.1 per cent.

As a result, the ABS said, the underutilisation rate remained at 10.6 per cent.

“The employment and participation measures remain historically high, while unemployment and underemployment measures are still low, especially compared with what we saw before the pandemic,” Lamb said.

“This suggests the labour market remains relatively tight.”

The employment-to-population ratio, 64.2 per cent, and the participation rate, 67 per cent, have both held at their historical highs.

And on the topic of hours worked, seasonally adjusted monthly hours worked rose by 0.4 per cent, which was slightly stronger than the 0.3 per cent rise in employment.

“The proportion of people working reduced hours because they were sick continues to be above pre-pandemic levels,” Lamb said.

“However, the proportion of people working less hours than usual due to economic reasons, such as no work or less work available, is below pre-pandemic levels, which points to continued relative tightness in the labour market.”

Elsewhere, the underemployment rate rose by 0.1 percentage point to 6.5 per cent, but this was still 0.1 percentage point lower than in August of last year and 2.2 percentage points lower than in March 2020.

The underutilisation rate – which the ABS noted combines the unemployment and underemployment rates – was steady at 10.6 per cent and remains “well below” the 13.9 per cent recorded in March 2020, before the COVID-19 pandemic.