Unemployment rate falls to 3.4 per cent as real wages go backwards

Tens of thousands of Australians found work last month, prompting an even tighter jobs market, but their real wages are lower than they were a decade ago.

Australia’s unemployment rate has defied expectations and decreased again to 3.4 per cent.

Market expectations were that unemployment would sit stagnant at 3.5 per cent or even grow slightly in the face of consecutive rate rises and a widening gap between inflation and wage growth.

The latest Australian Bureau of Statistics data for October reveals 32,000 people found jobs during the month, including 16,000 full time jobs, increasing the employment-to-population ratio to 64.3 per cent.

The government says “all the macroeconomic factors” are there for real wages to be going forward, but with data earlier this week revealing real wages are lower than they were a decade ago, now was the time for widespread reform.

Wages rose one per cent in the last quarter and 3.1 per cent over the last year, well below the CPI rate of 7.3 per cent.

Employment Minister Tony Burke said this week’s figures were the clearest indication yet that the parliament needed to pass Labor’s Secure Jobs, Better Pay bill before the end of the year.

“The old argument that if you have sustained low unemployment, that of itself will get wages moving, is simply not holding up against the evidence we get everyday,” he said.

“Still, we’re in a position where wages are going backwards, and today they are lower than what they were a decade ago

“Anyone who questions whether or not the Secure Jobs, Better Pay bill is urgent, just needs to look at these figures.

“All the macroeconomic conditions you should have for real wages to be going forward … are all there. The drivers should be there.

“Real wages aren’t going to be in front of the extraordinary inflation figures we’re seeing at the moment, but they should be at a figure higher than 3.1. That won’t happen unless we change the law.”

Australia’s unemployment rate has fallen again to 3.4 per cent. Picture: NCA NewsWire / Brenton Edwards

The ABS said the seasonally adjusted participation rate remained steady at 66.5 per cent, slightly below the historical high of 66.7 per cent – but 0.7 percentage points higher than before the pandemic.

In terms of underemployment, the rate fell 0.1 points to 5.9 per cent – 2.8 percentage points below the pre-pandemic rate.

Bjorn Jarvis, head of labour statistics at the ABS, said fewer people than usual took leave during October, resulting in a stronger growth than usual in seasonally adjusted monthly hours.

“The number of people on annual leave in October 2022 was around 10 per cent less than we typically see at this time of year,” he said.

Flood events across NSW, Victoria and Tasmania meant more people worked reduced hours – a total of 100,000 during the month.