Unemployment down to 4.9 per cent, its lowest level in a decade

Australia’s jobless rate is at its lowest point in a decade despite the ongoing Covid crisis, reaching one key target outlined months ago.

Australia’s jobless rate has hit its lowest point in a decade as the country’s economic rebound from Covid-19 gathers pace.

Figures released by the Australian Bureau of Statistics on Thursday show unemployment has dropped by 0.2 percentage points to 4.9 per cent in June, its lowest point since June 2011.

The development came just months after Treasurer Josh Frydenberg warned substantial wage growth would not be possible until unemployment had a “four in front of it”.

Treasurer Josh Frydenberg welcomes the strong jobs numbers in Melbourne. Picture: Sarah Matray / NCA NewsWire

The Treasurer on Thursday described reaching the milestone as “very significant”, having prioritised an unemployment target under 5 per cent in the lead-up to the May budget.

“Our economic plan is working. There are more people in work today than before the pandemic began, and our economy is bigger today than before the pandemic began,” he said on Thursday.

Mr Frydenberg conceded Australia was “by no means out of this pandemic” but said the economy had shown “remarkable resilience” in the face of Covid-19.

“There is still a long way to go to secure our economic recovery, but Australia’s economy is resilient, it is strong. And today’s job numbers underline that very fact,” he said.

The Treasurer says Australia’s economic plan is working. Picture: Sarah Matray / NCA NewsWire

The figures took into account Victoria’s two-week lockdown in April and June, but not the one under way in NSW.

On Twitter, the Treasurer warned Australians the NSW lockdown was a reminder of “challenging days ahead”.

A total of 679,100 Australians are now unemployed, compared to 701,100 in May.

This puts unemployment almost 3 per cent lower than it was this time last year. In June 2020, at the peak of the pandemic, unemployment sat at 7.4 per cent.

The number of Australians who are employed rose by almost 30,000 between May and June to reach 13.15 million, according to the ABS.

In May, unemployment dropped more significantly, falling by 0.4 percentage points from the month prior.

Tasmania saw the biggest decrease in unemployment over June, with a drop of 1.2 per cent. Meanwhile, Western Australia saw an increase of unemployment of 0.5 per cent.

Indeed, not all of the statistics were positive. The underemployment rate increased 0.5 points to 7.9 per cent.

Underemployment consists of those who are working part-time but who would prefer to work more hours, and those who are classified as full-time workers but are not working full-time hours.

The participation rate stayed steady at 66.2 per cent.

The labour force participation rate is the number of people who are employed or unemployed but looking for a job, divided by the total working-age population.

The Treasurer highlighted that youth unemployment hit its lowest rate in 12 years.

However, youth unemployment remains at 10.2 per cent.

BIS Oxford Economics chief Australia economist Sarah Hunter echoed Mr Frydenberg, saying the drop in unemployment “further confirmed the strength in (Australia’s) economic recovery”.

“Looking ahead, assuming the current outbreaks are contained, it is likely that employment will continue to rise and the unemployment rate fall,” Dr Hunter said.