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Over September, Australia’s unemployment continued to fall despite job cuts, people worked fewer hours overall, and retail enjoyed a slight boost in revenue.
Unemployment drops despite job cuts
Even though September saw employers reduce full-time positions by 39,900, Australia’s jobless rate fell from 3.7 per cent in August to 3.6 per cent in September.
“It is important to remember that a fall in unemployment does not always mean much higher employment,” said Kate Lamb, ABS head of labour statistics, “The fall in the unemployment rate in September mainly reflected a higher proportion of people moving from being unemployed to not in the labour force.”
The employment increases experienced in September were reportedly in line with the average growth rate seen in the 20 years leading up to the pandemic.
Although the growth in employment has slowed considerably, participation rates and the employment-to-population ratio are still near-record highs. “These still point to a tight labour market,” said Ms Lamb.
For reference, 561,500 new jobs have been created since May 2022. According to Treasurer Jim Chalmers: “This is the most jobs created in the first term of any government on record, and we’re only halfway through the term.”
While Dr Chalmers welcomed the fall in unemployment rate, he explained that unemployment is expected to rise soon. “We still expect unemployment to rise as a consequence of higher interest rates and concerns around China, and conflict in Europe and now the Middle East as well,” said Dr Chalmers.
Hours worked continue to fall
At the same time, monthly hours worked fell by 0.4 per cent in September, on the back of a 0.5 per cent fall in August. According to Ms Lamb, the steady fall might suggest an easing in labour market strength but could partly be explained by particularly strong long-term growth.
“As seen in the job vacancies data, demand for workers has fallen slightly, but the labour market continues to be relatively tight and resilient,” Ms Lamb explained.
“In trend terms, growth in hours worked has been steadily slowing since June 2023 and fell slightly in September,” said Ms Lamb. “However, in trend annual terms, the hours worked growth remains noticeably higher than the growth in employment.”
The fall in worked hours is an example of the “softening” in labour market conditions expected by Dr Chalmers, who also cited lower participation and fewer job ads as consequences of domestic and global economic challenges.
Cost of goods and services surges
While the consumer price index (CPI) – the percentage change in the price of a basket of goods and services consumed by households – rose by 1.2 per cent in the September 2023 quarter and 5.4 per cent annually, the increase was not universal, the growth was lower than those seen throughout 2022.
“While prices continued to rise for most goods and services, there were some offsetting falls this quarter, including for childcare, vegetables, and domestic holiday travel and accommodation,” explained Michelle Marquardt, ABS head of prices statistics.
The biggest contributors to the September quarter rise were the following:
- Automotive fuel (up 7.2 per cent)
- Rents (up 2.2 per cent)
- New dwellings purchased by owner-occupiers (up 1.3 per cent)
- Electricity (up 4.2 per cent)
Cost-of-living pressures and financial wellbeing play a significant role in influencing the mental health of workers, as outlined in “On a knife’s edge – navigating the cost-of-living crisis to boost employee financial wellbeing”.
Retail turnover grows
At 0.9 per cent, September saw the largest gain in retail turnover since January, according to the ABS, despite remaining low by historical standards.
According to Ben Dorber, ABS head of retail statistics, the rise can be attributed to a diverse range of factors, including: “the warmer-than-usual start to spring [which] lifted turnover at department stores, household goods and clothing retailers, with more spending on hardware, gardening, and clothing items”.
“Also adding a boost to turnover in household goods retailing was the releases of a new iPhone model and the introduction of the Climate Smart Energy Savers Rebate program in Queensland,” Mr Dorber added.
“Retail turnover in trend terms is up only 1.5 per cent compared to September 2022 – the smallest growth over 12 months in the history of the series.”
RELATED TERMS
The term "workforce" or "labour force" refers to the group of people who are either employed or unemployed.
Nick Wilson
Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.
