Reopening puts a rocket under jobs rebound

Another solid month for the labour market, led by Victoria, has pushed the unemployment rate in November down to 6.8 per cent.

The ABS released November job figures hard on the heels of Treasury’s mid-year budget update. Picture: Jenny Evans

Victoria’s reopening helped drive the unemployment rate down to 6.8 per cent in November from 7 per cent, extending the national labour market recovery as Josh Frydenberg said the faster than anticipated rebound meant the jobless rate would return to pre-COVID levels by 2024.

The country added 90,000 jobs in November, with Victoria accounting for 74,000 of that lift, the Australian Bureau of Statistics figures showed. The data confirmed a second solid month of jobs growth, after an additional 180,000 people found work in ­October.

Following the loss of 875,000 jobs early in the pandemic, the economy has regained 84 per cent of these jobs – and 86 per cent of lost hours worked – since the start of June.

 

Nationally, full-time jobs climbed by 84,200 in November, while part-time employment ­increased by 5800, the seasonally adjusted data revealed. There were 2.5 per cent more hours worked in total over the month — still 1.2 per cent below where it was a year before.

Delivering the mid-year budget update on Thursday, the Treasurer said the unemployment rate was expected to steadily decline to 6.25 per cent by mid-2022, 5.75 per cent by mid-2023, and 5.25 per cent by 2024 — the level at which Mr Frydenberg said the government’s fiscal strategy would shift towards budget repair.

“We have come a long way from Treasury’s initial estimate early on in the pandemic that the unemployment rate could hit 10 per cent by year-end or 15 per cent in the absence of JobKeeper,” Mr Frydenberg said.

Treasury estimates unemployment will now peak at 7.5 per cent in the March quarter 2021, down from a peak of 8 per cent forecast at the time of the budget.

Private sector economists, however, are significantly more optimistic. CBA head of Australian economics Gareth Aird said solid economic growth and zero net migration would combine to drive the unemployment rate down to 5.75 per cent by the end of next year.

Mr Aird said when borders were open, the economy needed to grow employment by about 18,000 a month to match the growth in the workforce and hold the unemployment rate steady.

With no net migration, ­monthly jobs growth of more than 6000 “will see the unemployment rate fall”, he said. “We think that (level of jobs growth) will be ­delivered comfortably in 2021 because we expect the Australian economic recovery to be strong.”

While Victoria’s 2.2 per cent lift in employment during the month was by far the largest increase — leading the national 0.7 per cent increase — there was a 0.6 per cent rise in jobs in NSW. Employment in Queensland, in contrast, fell by 0.8 per cent in November.

ABS head of labour statistics Bjorn Jarvis said “the gap between Victoria and the rest of Australia has narrowed considerably since September” — although employment in Victoria in November was 2.1 per cent below March, compared to 0.7 per cent in the rest of Australia.

Hours worked increased by 5.2 per cent in Victoria, following the 5.6 per cent increase recorded in October. NSW also recorded a “large” increase of 2.3 per cent, the ABS said, after a 1.7 per cent drop in October. Nationally, the participation rate increased to a record 66.1 per cent, from 65.8 per cent in October.

The underemployment rate — which includes those without employment and those with jobs but who would like to work more — dropped sharply in November to 9.4 per cent, from 10.4 per cent a month before.