Jobless rate drops to 5.6pc in March as WA booms

A booming West Australia economy has helped drive national unemployment down to 5.6 per cent, as the labour market notched its sixth consecutive month of jobs growth.

Unemployment in Western Australia is now at its lowest since December 2013. Picture: Getty Images

A booming West Australian economy has helped drive national unemployment down to 5.6 per cent in March, as the labour market smashed expectations again and notched up its sixth consecutive month of jobs growth.

The latest figures from the Australian Bureau of Statistics show the key jobless gauge fell from February’s 5.8 per cent as employment lifted by a powerful 70,700 in the final month before the end of JobKeeper — about double the number that had been predicted by economists.

An increase of 91,500 in part-time employment explained all of March’s gains, as full-time employment fell by 20,800, the seasonally adjusted figures showed.

WA accounted for nearly half of the total lift in employment, recording an additional 33,000 people in jobs and a 9.2 per cent jump in total hours worked — the strongest in the country — as the state rebounded from the lockdown in early February.

 

Amid a renewed mining investment boom driven by surging iron ore prices, unemployment in WA plunged from 6 per cent to 4.8 per cent, its lowest level since December 2013.

Queensland recorded the next biggest increase in jobs in March. Employment in both states is well above pre-COVID levels.

Employment growth in NSW and Victoria was more sedate.

Nationally, the labour market has recouped all of its COVID-related losses, with total employment up to 13,077,600 in March.

In a further sign that the labour market recovery from the steepest downturn since the Great Depression is now complete, total monthly hours worked across the economy increased by 2.2 per cent, surpassing pre-COVID levels for the first time since the recession and hitting a record high.

The jobless rate would have fallen further were it not for a lift in the participation rate, which climbed from 66.1 per cent in February to 66.3 per cent in the latest release, also setting a new record.

Underemployment, which measures those who say they don’t have enough work, dropped a sharp 0.6 percentage points to 7.9 per cent — its lowest level since 2014.

CBA head of Australian economics Gareth Aird said the jobs numbers were “incredibly solid” and that it was time to stop using the word “recovery”.

 

“The domestic economy is now simply in expansion mode,” Mr Aird said.

The unemployment rate remained well above the 5.1 per cent recorded in February last year, although forward indicators of ­labour demand, including job ­vacancies and employment intentions among firms, suggest the ­unemployment rate will continue to fall over coming months.

NAB this week estimated the jobless measure would reach 5 per cent by the end of this year. Economists and policymakers have warned, however, that the end of JobKeeper could halt or reverse the downward trend, at least for a month or two.

Treasury officials have identified those JobKeeper recipients working zero or very few hours for economic reasons as being the most at risk of losing their jobs after the scheme was stopped.

The latest labour figures offer further evidence that the post-wage subsidy hit to employment may not be as large as feared.

 

The number of Australians reporting working zero hours due to not enough work being available or being stood down fell sharply in March, from 126,500 to 56,900.

After peaking at 767,000 in April last year, the number of employed people on zero hours due to lack of work is now just below levels preceding the pandemic.

Josh Frydenberg has flagged that the task of repairing the massive budget deficit left behind by the pandemic would begin when unemployment was “comfortably below” 6 per cent.

The Treasurer on Thursday said “we are not comfortably below 6 per cent today and we’re not out of the pandemic”.

With “a long way to go” before the global health crisis is over, Mr Frydenberg said it was “not a time for austerity”, and foreshadowed he would revisit the Morrison government’s fiscal strategy in a speech before the May budget.

 

“It’s a time to move to the next phase of our recovery plan, which is targeted support,” he said.

Despite the great strides made in lowering unemployment since the recession, economists said the pace of the jobs recovery did not mean that the Reserve Bank would be looking to lift interest rates from their record low of 0.1 per cent any time soon.

Originally published as Jobless rate drops to 5.6pc in March as WA booms