Thanks to a boom in part time jobs, unemployment ended the difficult 2020 calendar year well below the 8% rate forecast by the Reserve Bank in its fourth and final Statement on Monetary Policy last November.
The Australian Bureau of Statistics (ABS) said in the December Labour Force report, out on Thursday that unemployment fell from 6.8% to 6.6% as 50,000 jobs were added last month.
That was in line with market forecasts and the jobless rate is now within sight of its most recent low of 5.1% in February 2020.
The ABS said the number of employed people in Australia was 88,000 lower in December compared to March, but 784,000 higher than in May.
“Although employment has recovered 90 per cent of the fall from March to May, the recovery in part-time employment has outpaced full-time employment,” ABS head of head of labour statistics Bjorn Jarvis said in a statement on Thursday.
While part-time employment was higher than March, full-time employment was 1.3% below March.
“The recovery in hours worked has been slower than the recovery in employment,” he said.
Seasonally adjusted unemployment fell in December by 30,000 people. That saw the unemployment rate fall 0.2 percentage points to 6.6%.
The participation rate, which represents the labour force as a proportion of the civilian population aged 15 years and over, rose by a further 0.1 percentage points to a new high of 66.2%.
“The rise in the participation rate reflects a net increase of around 20,000 people in the labour force in December. There were 108,000 more people in the labour force than in March – 196,000 more unemployed people and 88,000 fewer employed people,” Mr Jarvis said.
The youth unemployment rate dropped 1.7 percentage points to 13.9% in December, and the youth participation rate fell 1.1 percentage points to 68.6%.
The ABS said that the growth in hours worked tells the story of the jobs recovery.
“The recovery in hours worked and employment slowed in December, with hours worked increasing slightly (0.1%) and employment increasing 0.4%.
“This followed increases in hours worked (2.5%) and employment (0.7%) in November (as Victoria came back on line), and increases in hours worked (1.2%) and employment (1.4%) in October.
Since the low point in May, total hours worked has increased by 161.5 million hours, recovering 87% of the 185.6 million hour decrease between March and May.
After larger falls than employment early in the COVID-19 period, hours worked has since recorded stronger growth than employment. In December, hours worked was 1.4% lower than March and employment was 0.7% lower than March.
