Aussies remain employed despite COVID-19’s impact

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May 14 2020
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Unemployment levels have increased but not to the level expected by most economists as JobKeeper continues to help keep the nation employed, official figures state.

Seasonally adjusted employment fell by 594,300 people between March and April, according to the Australian Bureau of Statistics. Large changes were seen across all labour market indicators in April.

Unemployment increased by 104,500 people to 823,300, and the unemployment rate increased by 1 percentage point from 5.2 per cent to 6.2 per cent.

While the larger than usual unemployment rate is having an impact on Australian households, economists have widely predicted that the number would rise to 8.2 per cent, before peaking at over 10 per cent

The larger than usual number of employed and unemployed people leaving the labour force resulted in an unprecedented fall in the participation rate by 2.4 percentage points to 63.5 per cent.

“This means there was a high number of people without a job who didn’t or couldn’t actively look for work or weren’t available for work,” Mr Jarvis said.

The impact of the COVID-19 pandemic on hours worked was also extensive. Total hours worked fell by around 9.2 per cent between March and April.

“The large drop in employment did not translate into a similar-sized rise in the number of unemployed people because around 489,800 people left the labour force,” said Bjorn Jarvis, head of labour statistics at the ABS.

Roy Morgan’s previously stated unemployment measure for April shows that a massive 2.16 million Australians were unemployed (15.3 per cent of the workforce), with an additional 1.32 million (9.4 per cent) underemployed.

In total, 3.5 million (24.7 per cent of the workforce) Australians are now either unemployed or underemployed.

This is 439,000 fewer than the 3.92 million unemployed or underemployed (27.4 per cent of the workforce) during the last two weeks of March (20-31 March 2020) immediately before the federal government’s JobKeeper program was announced.

As job losses rose, wage growth appears to be a thing of the past, with seasonally adjusted wage price index rising 0.5 per cent in the March quarter 2020 and 2.1 per cent through the year, according to figures released today by the Australian Bureau of Statistics (ABS).

ABS chief economist Bruce Hockman stated: “Quarterly wage growth remained steady at 0.5 per cent over the past four quarters and on the back of a year of relatively stable but slow economic growth. This contributed to an easing in the annual rate of wage growth.”

However, UBS economist George Tharenou noted that “the Q1 wage price index (excluding bonuses) held at 0.5 per cent for the quarter (UBS & mkt: 0.5 per cent), the equal second-lowest quarter on record.

“The year-on-year ticked down to 2.1 per cent, the equal lowest since 2017, and further below its 3.2 per average since 1998,” Mr Tharenou explained.

New adverts fall

Kendra Banks, managing director, SEEK ANZ shows the impact of COVID-19 with new job adverts falling sharply during the month of April following new laws being introduced.

“The full set of social isolation measures were not imposed until mid-March, which explains why March job ad declines were -27.4 per cent, compared to April’s decline of -49.9 per cent.”

“In the week ended 10 May, job advertising was down -59.7 per cent compared to the same week last year. At the lowest point in April, week ended 19 April shows a job ad decline of -69.1 per cent compared to the same week in 2019,” Ms Banks concluded.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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