Underemployment stubbornly high, but signs of a rebound next month
The unemployment rate edged up to 4.6 percent in September, seasonally adjusted, from the recent low of 4.5 percent in August 2021. But once again this does not tell the true story, which is of falling workforce participation rates and stubbornly high underemployment.
There was a fall in employment for a second month in a row – of 138,000 people – caused by continued lockdowns, and with more people exiting the labour market (that is, they are no longer employed or seeking work). Around 130,000 people left the labour market in September 2021.
Underemployment remained relatively high this month at 9.2 percent, though edging down slightly from 9.3 percent indicating the impact of the lockdowns continue to be truly felt through a reduction in hours worked. While there was a modest increase in hours worked from last month, up 0.9 percent or 15 million hours, monthly hours worked still remain 36 million hours below pre-pandemic March 2020 levels.
COVID-19 lockdowns across the eastern states continue to hurt. The September month will be the last month of the full NSW lockdown, with the latest data reflecting the broader lockdown across NSW and Victoria and the ACT.
- In NSW, 24,800 fewer people were employed in September, which brings a combined reduction in that state since lockdowns began of 244,000 – with a similar number of people leaving the labour market.
- Queensland may have lost the State-of-Origin but they are beating COVID-19, with employment increasing by 30,800 jobs. There was a strong increase in hours worked of 5 percent or 18.7 million hours, seasonally adjusted.
- Victoria lost 122,800 jobs in September as lockdowns continue. There was a similar fall in the number of people participating in the labour force, a reduction of 103,600. Western Australia’s strategy of isolation continues to see a steady but slow growth in employment (of 3,000 jobs).
- In the ACT, there was little change in employment, unemployment and the labour market over the past two months, and the impact of the lockdown in the territory is reflected in a drop in monthly hours worked.
- There is some evidence that the state lockdowns affected South Australia, through direct COVID-19 tracking case scares as well as an interconnected economy induced slowdown.
At least, however, the economy did show signs of resilience in September despite the lockdowns. While the underemployment rate remains too high, it is still a large improvement on the lows set in the lockdowns of 2020 of 13.6 percent.
And there were significant state variations. NSW hours rose by 13.8 million hours – bringing hours worked in the state above its recent low and above that set during last year’s lockdown in April 2020. Queensland’s monthly hours rose by 19 million hours, and there were modest increases in SA and WA, with only Victoria and ACT seeing a fall.
With strong daily vaccination rates, NSW is already gradually moving out of lockdown and other eastern states are set to follow suit in October, meaning the labour market is well positioned for a rebound in next month’s figures.