Delta job slump rebound tipped

While more than 500,000 Australians have been stood down since late June, economists say the ‘downward spiral’ in employment eased in September.

Workers are still being stood down, but the worst for the labour market may be behind us as states prepare to lift lockdowns. Picture: NCA NewsWire / David Swift

More than half a million Australians have been stood down since Delta lockdowns began in late June, but economists said the “downward spiral” in employment eased in September ahead of an expected labour market rebound as restrictions ease in coming weeks.

Weekly payroll jobs figures from the Australian Bureau of Statistics revealed a further 0.7 per cent net drop in employees paid through the Australian Taxation Office’s single-touch payroll system over the fortnight to September 11, following a larger fall of 1.5 per cent in the previous fortnight.

EY senior economist Johnathan McMenamin said “the downward spiral in the labour market is easing, and employers must start to prepare to deal with a very different labour market as we continue to learn to live with the virus”.

Reserve Bank governor Philip Lowe this week foreshadowed an upcoming jobs recovery, noting the RBA’s business liaison program and still elevated number of job vacancies suggested “many firms are seeking to hire workers ahead of the expected reopening in October and November”.

The latest decline in the locked-down jurisdictions showed there were now 0.5 per cent fewer payroll jobs nationally than before the pandemic, revealing the extraordinary blow to employment as a result of stay-at-home orders

According to ABS analysis provided to The Australian, between June 26 – when the Greater Sydney lockdown began – and September 11, payroll jobs dropped by about 513,000.

Over that period, payroll jobs dropped by 322,000 in NSW, by 171,000 in Victoria, and by 21,000 in the ACT.

ABS head of labour statistics Bjorn Jarvis said outside those three jurisdictions, falls in Queensland, South Australia and Tasmania were offset primarily by an increase in Western Australia, as well as in the Northern Territory.

As NSW Premier Dominic Perrottet announced an accelerated easing of restrictions, including an earlier return to school, the latest ABS figures showed payroll job losses slowed in the state: falling by 0.3 per cent in the latest fortnight, compared with the 1.6 per cent fall in the previous fortnight.

In contrast, the ACT and Victoria – where leaders are planning a later removal of lockdowns – recorded the largest falls in payroll jobs during the fortnight to September 11, recording falls of 2.3 per cent and 1.8 per cent, respectively.

Victorian payroll job losses were led by the arts and recreation industry, where the number of employees paid through the ATO’s STP system dropped by more than a fifth in the fortnight.

The ABS said Victorian payroll job losses accounted for almost three-quarters of all jobs lost during the fortnight.

Economists warned that the official September labour force figures – to be released next Thursday – will show another sharp drop in employment, as the survey captured the Victorian and ACT lockdowns for the first time.

CBA senior economist Kristina Clifton said “we are not likely to see the labour market data improve until the November labour force survey, which will print in mid-December”.