The latest Labour Force data for November 2023 released by the Australian Bureau of Statistics (ABS) has revealed that the country’s unemployment rate rose by 0.1 per cent to 3.9 per cent in seasonally adjusted terms. This was up from the revised 3.8 per cent in October.
This data has revealed the highest unemployment rate recorded since May 2022.
Over the month, the number of employed people increased by 61,000 and the number of unemployed people rose by 18,800 (seasonally adjusted).
ABS head of labour statistics Bjorn Jarvis said: “The combination of strong growth in both employment and unemployment in November saw the employment-to-population ratio return to a record high of 64.6 per cent and the participation rate [reached] a new high of 67.2 per cent.
“We have continued to see employment growth keeping pace with high population growth through 2023.
“The employment-to-population ratio has been high for a long time now, between 64.4 per cent and 64.6 per cent since February 2023 and between 64.3 per cent and 64.6 per cent for the past 18 months.
“Similarly, participation continues to be high. In addition to strong employment growth over the past year, the number of unemployed people has also increased by around 81,000 people and the unemployment rate has risen by 0.4 percentage points.
“However, both unemployment measures remain well below their pre-pandemic levels.”
Commonwealth Bank of Australia (CBA) senior economist Belinda Allen said the November data set was “a classic example” of how monthly Labour Force releases can “often serve up an intriguing set of numbers”.
“A set of numbers like this can often make it hard to know where to focus. The unemployment rate is the best place to start,” Ms Allen said.
“The lift in the unemployment rate is one indicator the labour market is loosening.
“We expect the unemployment rate to continue to lift from here as supply outpaces demand and [reaches around] 4.5 per cent by mid-2024.”
ANZ senior economist Blair Chapman said this dataset does not change the major bank’s view that the Reserve Bank of Australia (RBA) will hold rates steady at 4.35 per cent until late-2024.
“The more robust labour market supports our view that the RBA will be later to ease than other central banks,” Mr Chapman said.
“Given the slowdown in economic activity in the September quarter, yearly growth in employment and hours worked should cool materially over coming months. The unemployment rate is likely to continue increasing modestly over the next few months.”
Westpac senior economist Justin Smirk said that mortgage pressures on households are causing them to respond by increasing their participation in the labour market to increase incomes.
“So far, the strength of the economy and labour market has been such that much of this increased supply has been absorbed. But that can’t last forever,” Mr Smirk said.
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