National jobless level up as RBA eyes Melbourne Cup Day interest rate cut

Heavy job losses in locked-down Victoria have swamped modest employment gains across the rest of Australia as the Reserve Bank weighs a Melbourne Cup Day rate cut.

Cycon Monero Group director Tony Ciccone says his ­engineering and construction firm is one of the rare Melbourne-based businesses to grow during the pandemic. Picture: Aaron Francis

Heavy job losses in locked-down Victoria have swamped modest employment gains across the rest of Australia as the Reserve Bank weighs a Melbourne Cup Day rate cut to increase the pace of the nat­ional economic recovery.

The unemployment rate edged higher to 6.9 per cent in September from 6.8 per cent in August, as Victorian jobs fell by 36,500 last month versus a 6000 increase in the other states and territories.

Scott Morrison on Thursday said the labour figures showed “why we’ve got to get Victoria open safely again”.

The country’s second-most populous state has now shed 73,000 jobs over the past two months, even as an additional 172,000 jobs were added across the rest of the country.

Treasury estimated Victoria‘s “effective” jobless rate — including those who have dropped out of the workforce since the pandemic and those still employed but working zero hours — climbed to 14 per cent from 12.9 per cent in August, and to 9.4 per cent from 9.2 per cent in the rest of Australia.

Economists sharply lifted the chances rates would be cut from 0.25 per cent to 0.1 per cent at the next RBA board meeting on Nov­ember 3 after RBA governor Philip Lowe said relaxing the restrictions would give monetary policy easing more “traction” and assist in the pace of the national recovery.

Dr Lowe warned that a deep but “uneven” COVID-19 recession had hit low-income families, the young and small businesses the hardest.

The comments came as the latest Australian Bureau of Statistics figures showed women — who were initially heavily affected by the lockdown — were now faring better than men.

“This uneven experience by age, industry, firm size and region will shape the recovery,” the RBA governor said.

“Some parts of the country and some industries face very real challenges. At the same time, others now have new opportunities.

“How well we support those who are most affected while at the same time capitalising on the new opportunities will shape the recovery over the next few years.”

Dr Lowe said that as the economy reopened, it was “reasonable to expect that further monetary easing would get more traction than was the case earlier.”

He did “not expect to be increasing the cash rate for at least three years”.

The Prime Minister said the people in Victoria were “feeling it incredibly hard”.

“In the last two months alone, more than 170,000 jobs all around the country, bar Victoria, have come back into the economy. Now, sadly, 70,000, just over that, jobs have been lost in Victoria,” Mr Morrison said.

Cycon Monero Group director Tony Ciccone said his ­engineering and construction firm was one of the rare Melbourne-based businesses to buck the trend and grow during the pandemic.

Mr Ciccone said the continuation of the construction industry during the lockdown allowed the company to take on 60 new workers during the pandemic, bringing its total staff numbers to 280.

“In construction, we are a bit sheltered to what is actually happening, but seeing what is happening with other industries, they would be struggling,” he told The Australian.

“We are probably the most ­fortunate people in (Victoria),” he said.

Mr Ciccone urged Victorian Premier Daniel Andrews to lift the lockdown for other industries.

“If this lockdown continues, not only are we going to have ­people dying from the virus but there will be a lot more people committing suicide,” he said.

“It is having a massive impact on people outside of ­construction.”

The 0.2 per cent fall in employment nationally in September revealed in the ABS statistics compared to the 1.1 per cent drop in Victoria.

Employment jumped by 1.3 per cent, or 32,180 people, in Queensland and by 0.1 per cent, or 3270 people, in NSW.

Ahead of the phasing down of the JobKeeper and JobSeeker supplement payments from the beginning of this month, the number of unemployed Australians lifted by 11,300 to 937,400 people in September, according to the seasonally adjusted ABS figures.

This compared with a peak of just over a million unemployed in July, but was still vastly higher than the about 700,000 the ABS registered without work but looking for a job in February before the pandemic hit.

The underemployment rate — which measures those who are working but would like to work more — also ticked higher to 11.4 per cent from 11.3 per cent.

Across the country, there were fewer people in work or actively looking for jobs, with the par­ticipation rate declining to 64.8 per cent from 64.9 per cent.

EY chief economist Jo Masters said after three strong months of employment gains, “the loss of job momentum (in September) raises concern that the cyclical downturn is still to come”.

“There is a question-mark over whether there is enough confidence in the business sector for stimulus announced in the federal budget to filter through fast enough,” Ms Masters said.

The data showed that 3.5 per cent of employed Victorians, or 113,000 people, worked zero hours for economic reasons. This pool of workers included those who had been stood down but remained ­attached to their employers via the JobKeeper program, and represented 60 per cent of the stood-down workers across the country in September.