Australia’s February Employment and Jobless Rate Rises
Synopsis
Australia added 48,900 jobs in February, more than doubling the forecast of economists, but its jobless rate climbed to 4.3 per cent, a three-month high. The job growth was all in part-time work, which increased by 79,000, while full-time employment fell by 30,000. A surge in the participation rate meant that more people were searching for jobs than the job market could absorb. Economists are keeping a close eye on the Iran war, warning sustained high energy prices could force the Reserve Bank of Australia to lift rates more again and slow the labour market.
Australia had 48,900 jobs in February, surpassing the estimates. But the employment rate still rose 4.3%. Most of these jobs were from part-time work as full-time employment declined by 30,000 on net over the month.
Key Highlights
- Australia created 48,900 jobs in February.
- Unemployment did increase, from 4.1% to 4.3%, a three-month high.
- Part-time positions surged by 79,000 as full-time jobs declined by 30,000.
- From when the new jobs were added, more people sought work than they could absorb.
Australia Employment Increased but Unemployment Still Rises
Australia’s jobs announcement this February showed a result that left economists surprised. The country created 48,900 jobs last month, which is more than double the number analysts had expected. But even after that, the unemployment rate rose from 4.1% to 4.3%, its highest level in three months.
The two being so at once is unique, but it simply comes down to one thing. Significantly more Australians sought work in February than normal. But when so many new people flood the job market all at once, even a better-than-expected month of hiring can’t find jobs for all of them.
Part-time Surges More
By the numbers, however, the picture gets less flattering. Part-time jobs surged by 79,000 people in the month. Full-time positions, by contrast, dropped 30,000. So, the net increase was all owing to part-time work, not the sort of steady, permanent employment that indicates the true strength of a labour market.
Many of the gains in part-time work were among older workers. Sean Crick, the head of labour statistics at the ABS, said a larger-than-usual number of people aged 65 and over had moved into part-time work this month. He also pointed out that fewer people left jobs to retire now than at this time last year. The total work hours declined to 0.2% on the month, which meant people were working a little less overall at a time when more of them were employed.
How Did this Happen at the Same Time
The participation rate, that is the share of people who were either working or looking for work increased in February 66.9% from 66.7%, the previous month. That’s a lot of new people suddenly entering the job market.
Fewer of those unemployed in January actually found work in February than had completed the process around this time in previous years, Crick noted. More people remained unemployed instead of quitting or leaving the workforce altogether, as can be the case when jobs are hard to find. The result was an increase in the total number of unemployed people, even as hiring in parts of the economy has picked up.
What this Means Going Forward
This data comes at a challenging time. The Reserve Bank of Australia lifted interest rates only days ago, and the jobs picture now is adding to uncertainty rather than clarifying it.
An economist at Oxford Economics, Harry Murphy Cruise said that the labour market was beginning to show early signs of cooling. The biggest risk looming on the horizon is war in Iran, he said, and if energy prices remain high for an extended period of time the RBA might have to be more aggressive, further pressuring jobs. Treasurer Jim Chalmers opted to find the glass half-full, noting Australia was doing well on employment by comparison with most other nations facing the same international headwinds. The broad summary, though, is one of a job market that remains strong but is beginning to crack at the fringes.
FAQs
- How many jobs did Australia add in February?
48,900, more than double the 20,000 predicted by economists.
- Were the new jobs full-time or part-time?
Mostly part-time. Part-time jobs increased by 79,000 and full-time jobs decreased by 30,000.
- What is the current unemployment level in Australia?
4.3%, up from 4.1% in January and the highest level in three months.
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