Unemployment hits 7 per cent as federal government payments to workers taper

The Australian Bureau of Statistics has revealed the latest unemployment figures that coincide with the easing of support measures.

The country’s unemployment rate has risen to 7 per cent, with 25,500 Australians now looking for work.

Latest figures from the Australian Bureau of Statistics show unemployment for October rose 0.1 per cent compared with the previous month, reflecting the first month since the federal government tapered JobKeeper and JobSeeker payments.

Unemployment for the month of September was 6.9 per cent.

Despite an increase in the unemployment rate, 178,800 people found a new job, and total hours improved by 1.2 per cent.

Axi chief global markets strategist Stephen Innes said the result was stronger than expected; however, monthly employment data sets were “notoriously volatile”.

“An improvement in labour market conditions is a necessary, but not sufficient, condition for the RBA (Reserve Bank of Australia) to move away from ultra-accommodative monetary policy,” Mr Innes said.

“Nonetheless, this data release supports the (RBA) board’s view that negative rates are extraordinarily unlikely …”

ANZ economists expected the unemployment rate to rise to 7.2 per cent, primarily due to the tapering of JobKeeper payments.

Westpac had also tipped a 7.2 per cent unemployment rate, with the number of jobs falling by 30,000. It was expecting the participation rate to ease to 64.74 per cent.

CommSec chief economist Craig James said the expansion in the workforce was being driven by self-employed people re-entering the jobs market.

“The complication in the latest data is that self-employed workers or owner-managers are flooding back to work from outside the labour force,” he said.

“Economic recovery is in everyone’s hands. Consumers need to spend; business needs to respond to incentives and take back existing workers as well as take on new workers.”

The employment rate is 1.7 per cent below pre-pandemic levels. Picture: William West / AFP

Mr Jarvis said employment in October was only 1.7 per cent below March levels, reflecting a large flow of people from outside the labour force re-entering the workforce.

Unemployment rates are calculated on the number of people actively look for work.

Victoria’s second lockdown has caused the state to experience the largest surge in its regional unemployment rate, which rose 0.7 percentage points to 7.4 per cent.

Tasmania has the highest level of unemployment at 8.2 per cent, followed by Queensland at 7.7 per cent.

NSW experienced the biggest improvement, falling 0.7 percentage points to an unemployment rate of 6.5 per cent.

The Australian Capital Territory has the lowest unemployment rate at 3.9 per cent.

Originally published as Unemployment hits 7 per cent as federal government payments to workers taper