Unemployment falls to 5.8pc as job seekers give up
Australia’s unemployment rate fell from 6 to 5.8 per cent in February because a large number of people gave up looking for work.
- Unemployment falls from 6 to 5.8 per cent
- Only 300 jobs added in February: +15,900 full-time, -15,600 part-time
- Australian dollar hits 76 US cents on the data
The Bureau of Statistics estimated that only 300 jobs were added in February, but unemployment still fell because the participation rate dropped.
Seasonally adjusted figures point to a 0.2-percentage-point fall in the proportion of the adult population in work or actively looking for it.
The fall in participation saw the key monthly hours worked figure go backwards slightly, while the employment-to-population ratio also eased to 61.1 per cent.
In more positive news, the quarterly figures show a slight improvement in underemployment.
The ABS said the underutilisation rate (which combines those who are unemployed with those who are working less hours than they would like) has edged 0.1 of a percentage point lower to 14.2 per cent.
The underutilisation figures continue to show a deep divide between men and women, with the female underutilisation rate at 16.4 per cent compared to the male rate of 12.3 per cent.
‘Positive number’ but doubts remain over ABS data
Overall, the jobs figures were seen as a positive, as the creation of 15,900 full-time positions offset a 15,600-strong fall in part-time jobs.
It’s too soon to conclude that the recent stagnation in employment is genuine and is not just a statistical fallacy.Paul Dales, Capital Economics
The typical economist forecast in a survey by Bloomberg was for 13,500 jobs to have been created and unemployment to remain steady at 6 per cent.
The Commonwealth Bank’s chief economist Michael Blythe said a steady trend unemployment rate at 5.8 per cent painted the most accurate picture of the jobs market.
“Net, net I would say it is a positive number in terms of the economic outlook. It’s still pretty much the case the unemployment rate is trending lower at the moment,” he told Reuters.
“That’s a pretty powerful signal about the economy and is certainly a message for the Reserve Bank as well.”
JP Morgan’s Tom Kennedy said the dip in participation also appeared to be an aberration.
“The participation rate has been moving higher for some time so for it to flick lower today is a little bit odd,” he told Reuters.
“We aren’t putting too much emphasis on that and we do think we’ll see a recovery in the participation rate going forward.”
Capital Economics analyst Paul Dales agreed that the latest figures are probably statistical noise, but he also argued that the strong growth at the end of last year was a bit overstated.
“It’s too soon to conclude that the recent stagnation in employment is genuine and is not just a statistical fallacy. But a weak performance in March would set off the alarm bells,” he wrote in a note on the data.
The Australian dollar jumped to 76 US cents by 12:28pm (AEDT) on the back of the results.
SA unemployment blows back out, Qld jobless rate falls
After having fallen dramatically over the past few months, South Australia’s unemployment rate surged dramatically in February.
It jumped from 6.8 per cent in January to 7.7 per cent last month, and is the highest jobless rate the state has recorded since August last year.
The rise was partly due to a 0.3-percentage-point increase in the state’s participation rate.
On the flip side, Queensland witnessed a dramatic drop in unemployment from 6.4 to 5.6 per cent, but its participation rate plummeted from 66.3 to 65.4 per cent.
New South Wales continues to have the best unemployment figures of the states, with unemployment easing from 5.5 to 5.3 per cent on the back of a significant fall in participation.
Western Australia and Victoria are stuck around 6 per cent unemployment, with Tasmania still close to 7 per cent.
The two territories continue to outperform, with both recording jobless rates below 5 per cent.
It is important to note that the seasonally adjusted state jobs figures are extremely volatile due to the smaller sample sizes involved in the ABS survey, particularly for the smaller states.
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