Australia’s labour market remains buoyant amidst job cuts- Oct 2023
Unemployment rate in September fell to 3.6%, compared to 3.7% in August even as employers shed almost 40,000 full-time jobs. Economists had forecast the jobless rate to remain unchanged, sending in mixed signals for the need for another move by the RBA to cool the economy.
The economy added a net 6,600 jobs, although employers reduced full-time positions by 39,900. Jim Chalmers hailed the numbers as a ‘warm welcome result’, with the total tally of jobs created in the economy since May last year, reaching a net 560,000. Participation rate fell by 0.2% to 66.7% from record levels with hours worked contracting to 1.93bn. Kate Lamb, the ABS head of labour statistics, mentioned that the fall in unemployment rate reflected a higher proportion of people moving from unemployed to not being in the labour force.
According to its estimates in August, inflation will return to the RBA’s preferred 2-3% by June 2025. The central bank has also tipped the jobless rate rising to 4% by the end of 2023. The recent softening in hours worked, relative to employment growth, may suggest an easing in labour market strength, though the current labour market remained ‘relatively tight and resilient’.