Normal service has been restored in the economy, judging by the January labour force figures from the Australian Bureau of Statistics which showed another fall in the unemployment rate and 29,000 new jobs added to the ranks of the employed.
The ABS data showed employment increased to 12,939,900, 59,000 less than the level in March 2020, on the eve of the pandemic and lockdowns.
Unemployment in January totalled 877,600, 114,000 more than March last year. The jobless rate eased to 6.4%, still well above the 5.2% in March 2020.
There were also other signs of the continuing improvement – but also signs of patchiness, especially for younger job seekers. While the participation rate declined 0.1 percentage points to 66.1%, it was still close to the historical high in December.
The youth unemployment rate remained at 13.9% in January, and the youth participation rate fell 0.2 percentage points to 68.4%.
Encouragingly the underemployment rate fell 0.4 percentage points to 8.1%, the fourth consecutive monthly fall.
This was 0.7 percentage points lower than March 2020 (8.8%) and reflected a larger than usual fall in the number of part-time workers who preferred more hours.
The underutilisation rate, which combines the unemployment and underemployment rates, fell 0.6 percentage points to 14.5%, 0.5 percentage points higher than its March 2020 level (14.0%) and a further sign of the lingering ripples from the first round of the pandemic and the various lockdowns and border closures.
Bjorn Jarvis, head of labour statistics at the ABS, said this latest data showed a continued recovery in the labour market into the new year.
“January 2021 was the fourth consecutive monthly rise in employment, as employment in Victoria continued to recover. Nationally, employment was only 59,000 people lower than March 2020, having fallen by 872,000 people early in the pandemic,” he said in Thursday’s release.
This contrasted with seasonally adjusted hours worked, which declined between December and January (a fall of 4.9% in seasonally adjusted terms), as more people than usual took annual leave over the summer.
“After a tough 2020, more Australians than usual took leave in the first two weeks of January, particularly full-time workers,” Mr Jarvis said.
“This fall in hours worked is different to the falls across April and May 2020, which resulted from the restrictions in the labour market, rather than people taking leave.
“However, the number of employed people who worked zero hours in early January in the capital cities also reflects some ongoing effects of recent lockdowns in Sydney and Melbourne.”
So the labour market’s increasingly healthy look will give the Morrison government the confidence it can end JobSeeker and JobKeeper in late March, and perhaps lift the jobless daily rate to a more meaningful level and target JobKeeper to impacted sectors such as aviation, tourism and north Queensland in particular.
