Not unexpectedly Australian unemployment fell to its lowest level on record last month as the economy continued to rebound from the impact of Covid Omicron.
The 14-year low of 4.0% (down from 5.2% in March, 2020, just as the pandemic was starting) came as the Australian Bureau of Statistics reported a 77,000 rise the number of people employed in February and a 19,000 drop in the number of unemployed.
The ABS said employment increased for the fourth month in a row in February and was around 202,000 people (or 1.5%) higher than the pre-Delta variant period high of June 2021. Employment was also 376,500 people (or 2.9%) higher than March 2020 at the start of the pandemic.
The participation rate (a measure of the share of the population in or looking for work) rose 0.2 points to 66.4% just under the all-time high of 66.7% a year earlier in February 2021.
The rate rose by 0.2 pts for men to 70.7% and by 0.2 pts to 62.4% for women. It was a solid 0.6 points above the March 2020 level.
Hours worked rose by 8.9% after the 8.6% Omicron-driven fall in January saw a number of shops and other venues close and a sharp rise in infections, sick leave and holidays.
Nationally the unemployment rate ranged from a record low of 3.7% in NSW to a high of 5.0% in South Australia (which might help explain why the Liberal government in that state is under pressure in the state poll this Saturday).
ABS head of labour statistics Bjorn Jarvis said in Thursday’s release that this “was the lowest unemployment rate since August 2008 and only the third time in the history of the monthly survey when unemployment was as low as 4.0 per cent (February 2008, August 2008, February 2022).”
He said that lower unemployment rates occurred in the series before November 1974, when the survey was quarterly.
“The 3.8 per cent unemployment rate for women was the lowest since May 1974. Meanwhile, the unemployment rate for men fell to 4.2 per cent, its second lowest level since November 2008 and just above the rate from December 2021 of 4.1 per cent.”
“While hours worked rebounded in February, they were still around 0.5 per cent below December, and also still slightly below (0.2 per cent) the pre-Delta period high of May 2021, reflecting a second month of impacts associated with the Omicron variant,” Mr Jarvis said.
The ABS data showed that full-time employment increased by 121,900 to 9.22 million people, and part-time employment fell 44,500 to 4.144 million. Part-time share of employment was 31.0%, 0.8 pts lower than in March 2020 and again confirmed the solid recovery in full time employment.
The data confirms the economy is still growing strongly as the recovery from the Omicron hiatus falls further behind.
It tells the Reserve Bank nothing it hasn’t known as it waits for the jobless rate to drop sustainably below the 4% level and stay there. The RBA sees this as providing the best chance for a sustained rise in wages to 3% or more.
