Unemployment steady at 5.6pc, full-time jobs rebound but trend remains weak: ABS

Updated

The unemployment rate has remained steady at 5.6 per cent, despite the creation of nearly 10,000 jobs in October, as workforce participation fell to a decade low.

Key points: ABS data estimate 41,500 full-time jobs added last month, 31,700 part-time jobs lost

Over the past year part-time work risen to 32pc of employment

Unemployment and participation rates steady

The Bureau of Statistics said 9,800 jobs were added last month.

The jobs growth was driven by 41,500 extra full-time positions while the seasonally adjusted estimates point to 31,700 part-time jobs being shed.

CommSec's chief economist Craig James said a 0.9 per cent rise in the total number of hours worked last month is a positive sign.

"The big news in the latest month is a big lift in the number of hours worked, in line with more full-time jobs created, and the jobless rate continues to fall to fresh three-and-a-half-year lows," he wrote in a note.

"More people in jobs and more people confident about their job status mean more spending and borrowing."

However, the head of the bureau's labour and income branch, Jacqui Jones, said the trend is still firmly towards more part-time and less full-time work.

"Since December 2015 we have seen a continued decline in trend full-time employment and an increase in part-time employment, with a corresponding increase in the share of hours worked by part-time workers," she noted in the report.

"This shift to part-time employment has been more pronounced for males compared to females."

Ms Jones also said part-time work had increased from around 31 to 32 per cent of total employment just in the past year.

"That's a relatively large shift, if you consider that it was around 29 per cent 10 years ago," she explained.

"Since December 2015, there are now around 132,700 more persons working part-time, compared with a 69,900 decrease in those working full-time."

Economists typically expected the jobless rate to remain steady from last month, with around 20,000 jobs added and the participation rate going up.

ANZ's monthly job ads survey has been showing moderate employment growth, consistent with the jobless rate continuing to edge lower.

Underemployment and low participation trends remain

However, there has been a trend towards more part-time jobs and underemployment, which has seen wage growth fall to record lows below 2 per cent.

There has also been a renewed decline in the participation rate - the proportion of people over 15-years-old in work or looking for it.

September's steep fall in participation has been revised further downwards to 64.4 per cent, and has not rebounded in the latest figures.

It is the lowest proportion of the population in the workforce since January 2006.

However, the aging of the population complicates analysis about whether the decline in participation is mainly down to labour market weakness or if retirement is playing a larger part, as explained in this analysis from 2012.

Capital Economics assistant economist Katie Hicks said another revision to the previous month's data also saw the annual rate of jobs growth fall.

"While employment increased in October for the first time since July, sizeable revisions to September's figures meant that the annual rate of employment growth fell to a two-year low of 0.9 per cent year-on-year," she wrote in a note.

"This will do little to allay growing concerns about the health of the labour market."

Jobless rate jumps in WA, other states steady or improving

In a state-by-state breakdown, the unemployment rate fell in Victoria, Queensland, South Australia and Tasmania.

Western Australia was the only state where the jobless rate ticked higher, from 6.1 per cent last month to 6.5 per cent in October.

The state currently has the highest unemployment rate, followed by Tasmania and South Australia, both on 6.4 per cent.

The jobless remained steady in New South Wales and the Northern Territory, while the participation rate grew in Victoria, South Australia and Western Australia.

Topics: economic-trends, unemployment, work, australia

First posted