Unemployment rate steady at 3.7 per cent as job numbers, migration surge

The number of Aussies in work has hit a new high as fresh figures show more people are picking up part-time jobs.

Australia’s jobless rate held steady at 3.7 per cent in August after the economy added a bumper 64,900 jobs across the month in the latest sign that Australia is on track to avoid a hard landing.

Growth in part-time jobs made up the lion’s share of the employment gains, up 62,100 positions, while full-time jobs grew by 2800, fresh seasonally adjusted figures from the Australian Bureau of Statistics show.

The increase easily offsets the 14,600 job losses recorded in August.

The participation rate, which measures the proportion of the working-aged population who are in work or looking for work, edged up by 0.1 percentage point to a record 67 per cent.

Australia employed 14.1 million people in August, the highest number ever.

Despite Australia’s population surging by 2.2 per cent, jobs growth kept up, rising by 2.8 per cent. Picture: NCA NewsWire / Nikki Short

Despite Australia’s population surging by 563,200 in the year to March, including an influx of 454,400 international migrants, workers just as easily found a job, as employment growth kept pace with the country’s surging population.

At the current pace of population growth, jobs numbers must grow by about 35,000 every month for the unemployment and participation rates to remain steady.

The employment-to-population ratio now sits at a series high of 64.5 per cent.

However, the underemployment rate – which measures those with a job but who are looking for additional hours, rose to 6.6 per cent, up from 6.4 per cent in July.

The ACT had the lowest unemployment rate at just 3.2 per cent, closely followed by NSW at 3.3 per cent.

ABS head of labour statistics Bjorn Jarvis said labour force data showed the jobs market continued to remain tight.

“The large increase in employment in August came after a small drop in July around the school holiday period. Looking over the past two months, the average employment growth was around 32,000 people per month, which is similar to the average growth over the past year,” Mr Jarvis said.

“The participation rate also increased, up to a record high of 67 per cent in August, which, together with the high employment-to-population ratio, continues to reflect a tight labour market.”

When the unemployment rate jumped by 0.2 percentage points last month, economists predicted that the labour market had reached a turning point. But despite slowing economic growth, which sits at just 2.1 per cent on an annual rate, the jobs market remains right.

Indeed, Australia’s labour market has remained extraordinarily resilient since the pandemic, with the jobless rate nearing 50-year lows in July and October last year when it dropped to just 3.4 per cent.

As the economy slows, the Reserve Bank forecasts that the jobless rate will increase to 3.9 per cent by year’s end and to 4.5 per cent by mid-2025.

Treasurer Jim Chalmers labelled the new jobless data as ‘tremendous’. Picture: NCA NewsWire / Martin Ollman

While not yet a cause for concern, the RBA will be growing increasingly wary that rates will have to rise further if the unemployment rate doesn’t tick higher.

Welcoming the fresh figures, Treasurer Jim Chalmers described it the result as “tremendous” but warned future job losses were inevitable.

“More Australians are in work than ever before, the participation rate is at a record high, and we still have an unemployment rate near historic lows,” Dr Chalmers said.

“High interest rates, high but moderating inflation and continuing global uncertainty – particularly the slowdown in China – will inevitably weigh on our economy and our labour market in the year ahead.”

But ANZ head of Australian economics Adam Boyton said the labour force survey was “more mixed” than the headline 64,900 gain in employment suggests.

Workers are still finding jobs. Picture: NCA NewsWire / Luis Enrique Ascui

“The vast bulk of jobs growth being part‑time and hours worked falling in the month takes the gloss off the impressive headline jobs print,” Mr Boyton said.

“Yes, the labour market is still very solid but slack is creeping in – witness the increase in the underemployment rate to 6.6 per cent in August from 6.4 per cent in July.”

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said the jobs figures would not move the needle for Australia’s central bank, which he said would keep rates steady at 4.1 per cent for the foreseeable future.

“The labour market will eventually cool as activity softens,” Mr Langcake said.

“Today’s data neither confirm nor deny whether this process has begun in earnest. Firms are still adding to headcount, and with job vacancies still elevated, employment growth will likely hold steady in the coming months.”

Originally published as Unemployment rate steady at 3.7 per cent as job numbers, migration surge