Unemployment rate falls to 6.2% in August, ABS reports

The jobless rate in Australia has hit new highs. Photo: iStockPeter Martin: Don’t panic if unemployment hits 6.5 per cent
Nanjing Night Net

Australia’s jobless rate fell to 6.2 per cent in August from 6.3 per cent in July, as the number of people employed rose more than 17,000.

The Australian Bureau of Statistics said on Thursday the improvement was “driven by increases in male full-time employment, and female full-time and part-time employment”.

It said the largest increase, of 10,100 jobs, was in full-time employment for males. The participation rate also contracted slightly, from 65.1 per cent to 65 per cent.

The headline figure was in line with expectations, and the Australia dollar recovered some lost ground after weakness in morning trade. At midday, the local unit was fetching US69.90¢, up from lows around US69.50¢ earlier.

The currency had already been under pressure in the morning after the Reserve Bank of New Zealand cut the official cash rate for the third time this year.

Some officials had warned that the unemployment rate could spike to 6.5 per cent in August because of tougher rules on access to unemployment benefits.

Analysts welcomed Thursday’s data, saying that at worst, it showed the labour market was steadying.

Australia and New Zealand Banking group senior economist Justin Fabo said the possibility that rule changes on the dole had influenced the data in July and August made the broader trend in the employment-to-population ratio more important in the current labour force series. This has been moving higher, “a sign of a slowly improving labour market [that is] consistent with labour demand indicators like job ads and the business surveys”, said Fabo.

However, he cautioned that soft domestic and global demand could arrest employment growth.

Capital Economics senior Asia economist Daniel Martin also welcomed Thursday’s data, but remained wary.

“The slowdown in GDP growth to its weakest in over four years in the second quarter suggests that a cooling of employment growth may still lie ahead,” he said, “but the Reserve Bank of Australia is unlikely to cut rates until it sees a turn in the labour market data.”

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