Unwrapping Australia’s latest unemployment data- Dec 2023

Australia’s unemployment rose to 3.9% last month, higher than a forecasted 3.8% as the economy added 61,500 new jobs in November. Bjorn Jarvis, ABS head of labour statistics, said the return of the participation rate reaching to a new high of 67.2% was a result of ‘strong growth in both employment and unemployment’. With more people in employment, Treasurer Jim Chalmers is looking forward to a Christmas surprise with higher tax revenue and lower social payments. Although the mid-year economic and fiscal outlook report released in December expects the jobless rate to be at 4.25% in June next year, the labour market outlook remains tight and will likely nudge higher the odds of another RBA interest rate hike to ensure inflation stays on its downwards tilt.   

While employment growth continued into November 2023 with a 0.4% rise, monthly hours worked rose by less than 0.1%, showing not all facets of the labour market remain tight. ‘The recent slowdown in hours worked over the past six months continued into November, with the total number of hours worked now around where it had been back in May,’ Jarvis said. The slight drops off in hours means that overall growth rates in employment and hours worked are now similar over the past 18 months, where the narrowing gap between these two growth rates reflects the loosening of the labour market. Across the states, NSW had the lowest unemployment rate at 3.4%, unchanged from October’s level. Australia’s jobless rate eased slightly to 3.7%, while Tasmania’s dropped 0.4 percentage points to 3.6%.