The national unemployment rate falls to 5.8 per cent, with economists hailing evidence that the labour market is improving much faster than most people expected
Australia’s unemployment rate fell to 5.8 per cent in February, down from 6.3 per cent.
- The number of Australians with jobs is almost back to pre-pandemic levels
- Women secured three quarters of the new jobs in February
- One economist says “the jobs lost in the early months of the coronavirus pandemic have now been fully replaced”
Economists said it was a surprisingly large fall, and provided evidence the labour market was improving much faster than most people expected.
An extra 88,700 people found jobs last month, pushing the number of Australians with jobs above 13 million for the first time in 11 months.
Total employment is now just 1,800 below pre-pandemic levels, in seasonally adjusted figures.
Commonwealth Bank economist Kristina Clifton said the surge in employment in February was well above the consensus estimate of 30,000.
“The jobs lost in the early months of the coronavirus pandemic have now been fully replaced,” she said.
“The next test for the labour market will be the expiry of the JobKeeper program [later this month].”
Bjorn Jarvis, head of labour statistics at the Bureau of Statistics, said the data showed the recovery in Australia’s labour market was continuing, particularly for women.
“Full-time employment increased by 89,000 people, of which 69,000 were women,” Mr Jarvis said.
“Female full-time employment was 1.8 per cent higher than March 2020, while male full-time employment was 0.8 per cent below.”
Overall in February, full-time jobs increased by 89,100, but part-time jobs fell by 500 positions.
ANZ economist Felicity Emmett said the result had taken economists by surprise.
“The unemployment rate has dropped like a stone,” she said.
“We weren’t expecting the unemployment rate to get to 5.8 per cent until the end of the year.”
ANZ senior economist Felicity Emmett(ABC News: John Gunn
Jo Masters, EY chief economist, said the fact that the participation rate remained at its record high of 66.1 per cent, and hours worked across the country were now 0.2 per cent higher than a year ago, meant Australia’s economic activity was on track to be above its pre-COVID outlook in the first quarter of 2021.
“The strength in the labour market also suggests the country is ready to absorb the removal of broad based government support such as JobKeeper, though there may be some bumps in the road in February, there were still 127,000 people working zero hours for economic reasons, compared to 60,000 last February,” she said.
“Generating faster wage growth, however, will require further progress in eroding the spare capacity in the labour market, with underutilisation still elevated at 14.4 per cent.”
The “underutilisation rate” Ms Masters referred to is the combination of the unemployment rate and the underemployment rate, which together equal 14.4 per cent.
Problematically, the underemployment rate referring to people with jobs who would like more hours rose from 8.1 per cent to 8.5 per cent in February.