Unemployment rate rises to 4% after a short-lived decrease

The unemployment rate has increased through the December period in 2024 after a short-lived decrease in the November 2024 period.

The latest data from the Australian Bureau of Statistics (ABS) revealed that the unemployment rate for December 2024 rose by 0.1 percentage point to 4 per cent after it previously dropped 0.2 percentage points in November 2024.

This short-lived decrease in the November 2024 period was quickly squandered. Bjorn Jarvis, ABS head of labour statistics, said: “With employment rising by 56,000 people and the number of unemployed increasing by 10,000 people, the unemployment rate rose to 4.0 per cent.”

Although the previous data released showed a decrease in the unemployment rate, Employment Hero’s CEO and chief economist, Ben Thompson, urged caution, arguing that Australia was “far from out of the woods”.

Speaking on the previous data, Thompson said: “While the ABS unemployment rate finally declines, Employment Hero’s data reveals nuanced challenges in Australia’s job market.”

“Wage pressures and economic headwinds are keeping workforce expansion tentative, signalling a challenging road ahead for Australian workers and small businesses as we enter 2025. While the job market shows signs of resilience, it’s far from out of the woods.”

Despite the increase in unemployment, the number of employed people across Australia grew.

“The number of employed people grew by 0.4 per cent in December 2024, slightly higher than the average monthly rise of 0.3 per cent during 2024. It was also higher than the average monthly population growth of 0.2 per cent over the year,” said Jarvis.

Although Jarvis noted that the unemployment rate has failed to have had any big changes over 2024, the employment-to-population ratio both increased to record highs since 2023.

“While the unemployment rate has barely changed since last December, rising by around 0.1 per cent, other key measures returned to highs and lows during 2024,” Jarvis said.

“Since December 2023, the employment-to-population ratio and participation rate have both increased back to record highs, up by 0.3 and 0.4 percentage points, respectively.”

The underemployment rate also fell 0.1 percentage point to 6.0 per cent in December 2024, 0.6 percentage points lower than December 2023 rate.

“The underemployment rate, which had generally been rising through 2023–24, has fallen over late 2024 to 6.0 per cent in December, around the recent low seen during the second half of 2022,” said Jarvis.

Along with these findings, there was also an influx in both the number of employed and unemployed people in the December period, as the participation rate saw a rise.

“The rise in both the number of people employed and unemployed also saw a further rise in the participation rate, that is the percentage of the population who are employed or unemployed,” said Jarvis.

“The participation rate rose 0.2 percentage points to a record high of 67.1 per cent in December. This was 0.5 percentage points higher than a year ago, and 1.6 percentage points higher than March 2020.”