Australia’s unemployment rate hits 5.2% in October as economy sheds 46,000 jobs | Unemployment

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Australia’s unemployment rate jumped to 5.2% in October, as more people began looking for work even as the economy shed 46,300 jobs in a period when half economy was still blocked by Covid.

The rise in unemployment according to the Australian Bureau of Statistics has been worse than markets expected. The Australian dollar fell to a one-month low of 73.17 cents US following the release of the report as investors lowered expectations of an early Reserve Bank ruling to raise rates to ‘interest.

Australia’s unemployment rate rose to 5.2% in October, bringing it closer to pre-Covid pandemic levels.

Labor force figures are notoriously volatile, with Covid disruptions making estimates more difficult. The ABS survey covered the period September 26 to October 9, which included a surge in census-related jobs but also the depths of lockdowns in major states of NSW and Victoria.

The number of unemployed has increased in some states, with an increase in the number of people looking for work, with the so-called participation rate rising from 64.5% in September to 64.7% last month. The increase was the first since June.

NSW appears further removed from the Covid-induced economic downturn than Victoria.

Last month, an additional 57,000 people in the state – which make up about a third of the national economy – began looking for work, of which 22,000 were successful. That still leaves the attendance tally of about 218,000 down from the May count.

“In contrast, while Victoria’s unemployment also rose, by 29,000 people, employment fell by an additional 50,000, with a drop of 0.4 percentage point in their participation rate,” said Bjorn Jarvis ABS, responsible for labor statistics, adding that the state’s workforce also remained 113,000 lower than in May.

“It may seem counterintuitive that unemployment is rising as conditions are about to improve,” Jarvis said. “However, it shows how unusual lockdowns are, compared to other economic shocks, in the way they limit the ability to work and to look for work.”

NSW’s unemployment rate rose 0.8 percentage points last month to 5.4%, Victoria’s gained 0.9 percentage points to 5.6%, while the ACT lockdown has saw the rate jump in half to 6.6%. At 5.2%, the unemployment rate is close to pre-pandemic levels.

Several central banks, including the Reserve Bank of Australia, have recently bemoaned the challenges facing forecasters.

On the one hand, consumers and businesses have received billions of dollars in support of Covid. There is also the additional “wealth effect” of rising house prices in many markets, the biggest asset for most people.

On the other hand, there are numerous supply disruptions due to the Covid outbreaks, and policymakers cannot be sure that there is a vaccine resistant strain around the corner.

“I think everything is set for a 2022 crackdown provided we run out of issues on the Covid front,” Gareth Aird, head of CBA’s economics team, said ahead of today’s publication. “In terms of what you can expect, things are looking pretty good.”

Sarah Hunter, Australian chief economist for BIS Oxford Economics, notes that the national tally of hours worked fell 0.1% in October, but again Victoria was the main drag.

“The total number of hours worked in NSW and ACT rose sharply (+ 3.9% and + 3.1%, respectively) during the month, a clear indication that businesses in both regions were preparing for reopen during this time, ”Hunter said. “There has also been a significant drop in the number of people working fewer or no hours for economic reasons, further confirmation that the east coast states are in recovery mode.”

Federal Treasurer Josh Frydenberg said the data showed the economy had “turned the corner.”

“Business and consumer confidence is on the rise, our business confidence [is] where it was in April, ”he said.

“Consumer confidence [is] now up eight out of the past nine weeks. Job vacancies are more than 30% higher than they were at the start of the pandemic and at a 12-year high. He said that “$ 340 billion is now accumulated in the balance sheets of households and businesses.”

As of Friday, the RBA’s quarterly monetary policy statement showed that the central bank expects the unemployment rate “to be just below 5% by the end of 2021, and that it is expected to decline steadily from there, to reach 4% by the end of 2023.

“The turnout is expected to rebound quickly to historically high levels, unlike the experience of some other advanced economies,” the RBA said.

Westpac, which was on the verge of pushing up the number of unemployed with its forecast of 50,000 losses, said it still did not know how many people would resume the job search and, therefore, what the rate of unemployment would be. unemployment.

“We currently have an unemployment rate peaking at 5% in December, as reopening the economy would create a short-term mismatch between workers returning to the workforce and when they start new jobs,” he said. Westpac senior economist Justin Smirk said at a briefing. Remark. “The October update suggests workers are returning at a much faster rate than expected.”

ANZ senior economist Catherine Birch said her bank forecasts a rapid rebound in employment and hours worked after the lockdown in the coming months.

“Newly filed jobs have jumped 39% in the past two months in New South Wales,” Birch said. “Over the past month, they have increased 15% in Victoria and 12% in ACT, to reach or exceed pre-foreclosure levels, according to the Internet Vacancy Index.”

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