Lowest unemployment figures for 13 years disguise a country divide. June improvement reversed by July lockdowns
The latest ABS jobs data shows state variations, driven by the latest COVID-19 lockdowns which have again divided the economy.
- There were 36,000 fewer people employed in NSW (the only state to have fewer people employed currently compared to pre-pandemic March 2020); in contrast, there were 16,000 more people employed in Victoria, 11,000 more employed in SA and 6,000 more employed in WA.
- Across the nation, there were 22,000 more males were employed, while there were 19,000 fewer females employed.
Today’s data suggests that the national labour market as a whole remains fairly strong. The unemployment rate fell further, sitting at 4.6 percent, the lowest it has been for 13 years. Employment saw another increase, with 2,200 more people in a job compared to last month and the proportion of the population employed remaining close to its June high of 63 percent (dropping slightly to 62.9 percent).
But, scratching the surface shows this positive headline isn’t all it seems, and isn’t uniform across the economy. While overall employment remained strong, the number of people in the labour market fell, which accounted for most of the fall in unemployment. Notwithstanding this fall, the overall national participation rate is still sitting at a relatively strong 66 percent.
Hours worked were the key problem however, with NSW the problem area. The Sydney lockdown in July saw total hours worked across the Nation fall further, by 3.1 million hours. NSW hours fell by 7 percent or 40.5 million hours – offsetting the gain in hours across the rest of Australia.
In NSW, over July, more than 600,000 people indicated that they worked fewer hours than usual as a result of ‘No work, not enough work available, stood down, or for other reasons not related to leave or bad weather’. There were also an additional 90,000 people on leave compared to July last year.
Victoria, by contrast, was a bright spot. Following the significant fall (1.8 percent or 39.6 million) in hours worked in June as a result of the Victorian lockdown, July’s rebound saw hours worked in Victoria more than recovering from its June slide. There were more than 270,000 less people indicating that they worked fewer hours than usual as a result of ‘No work, not enough work available, stood down, or for other reasons not related to leave or bad weather’ in Victoria in July compared to June. There were also 24,000 less people on leave compared to July last year.
Underemployment was again a problem, deteriorating in July, reaching 8.3 percent, reflecting the fall in hours worked and the effects of the lockdowns. Again, NSW was the problem area, with its underemployment figure rising to 9.3 percent, overshadowing the improvement in Victoria, where underemployment fell from 10.1 percent to 8.2 percent.
WA and Tasmania were the only other two states that saw an improvement in underemployment over the month. Overall, there were 646,000 people in Australia who worked fewer hours than normal in July because they had no work or not enough work – 126,000 more than in June. There were also around 190,000 more people on leave compared to July last year.
In conclusion, while we saw a strengthening economy in the June labour market data, the July data shows how quickly this can reverse when lockdowns are implemented across the nation. The impacts of the more stringent lockdowns across Sydney, and the new lockdowns across the broader NSW state, and in many of the other states and territories, will come through in next month’s data release.
Yet there is still some positive context. Even with these ups and downs detailed in today’s figures, the Australian economy shows remarkable resilience in the face of challenges posed by lockdowns. Despite lockdowns in our largest state, hours worked in July 2021 remained above Australia’s pre-pandemic figure in March 2020.