Australian Unemployment Rate Remains at 4.2 Percent, More Working Part-Time

Pedestrians and shoppers move through the central business district (CBD) in Sydney, Australia, on Aug. 6, 2024. Lisa Maree Williams/Getty Images

Australia’s unemployment rate remained unchanged at 4.2 percent in August, according to seasonally adjusted Australian Bureau of Statistics (ABS) data.

More Australians than ever are continuing to engage in the employment market, while they are also working more hours per month.

However, the number of individuals working part-time rose by 50,600, while full-time employment fell by 3,100.

Overall, the data, released Sept. 19, showed nearly 14.5 million Australians were employed in August.

The number of employed people rose by 47,500, while those unemployed fell by 10,500.

“This resulted in the unemployment rate remaining steady at 4.2 percent and the participation rate remaining at its record high of 67.1 percent,” ABS head of labour statistics Kate Lamb said.

Monthly hours worked increased by 0.4 percent, which was slightly stronger than the 0.3 percent rise in employment.

The proportion of people working less hours than usual due to economic reasons, such as no work or less work available, is below pre-pandemic levels, Lamb added, saying that this pointed to continued tightness in the labour market.

Underemployment Rate Rises

Meanwhile, the underemployment rate rose by 0.1 percentage point to 6.5 percent. However, this was still lower than pandemic levels.

Further, the underutilisation rate, combining unemployment and underemployment, held steady at 10.6 percent.

The ABS highlighted this remains well below the 13.9 percent recorded in March 2020 before COVID-19 policies were enacted.

“The employment and participation measures remain historically high, while unemployment and underemployment measures are still low, especially compared with what we saw before the pandemic. This suggests the labour market remains relatively tight,” Lamb said. 

Banks Respond to Data

Responding to the results, ANZ Senior Economist Catherine Birch said employment rose above expectations.

Birch reiterated ANZ’s prediction that the Reserve Bank of Australia (RBA) will not start bringing down interest rates until February 2025.

“While we continue to expect the RBA to start easing its cycle in February 2025, the risks look to have tilted to a later rather than an earlier start, particularly given the current momentum in the labour market,” she said in a research note to investors.

Meanwhile, ING Bank said it was too soon to start drawing any conclusions about what this means for RBA policy.

It said the devil is in the detail, noting that the strong headline employment growth “all came from the part-time sector.”

“These jobs, which are almost by definition more poorly paid, and often come with lower job security, perks and other benefits, will have a smaller impact, job-for-job, on household spending than full-time employment growth,” ING said, highlighting the data showing a fall in full-time jobs.

Labor Highlights Employment Record, Coalition Disagrees

Employment Minister Murray Watt and Treasurer Jim Chalmers said the labour force figures show that close to one million jobs have been created since the Albanese government came to office.

“This is a solid achievement in the context of a slowing economy and softer labour market. It’s a tribute to Australian workers and employers, and it justifies the responsible way we’re managing the economy,” they said.

“Our laws have introduced new rights for workers—the right to disconnect, stronger protections for gig workers, and new rights for casual workers.

“We’re seeing the highest number of employees covered by newly approved enterprise agreements in over a decade.”

However, Shadow Treasurer Angus Taylor said Labor inherited a strong labour market from the Coalition, and that Labor’s claims about the job market don’t match what Australians are feeling.

“After two years of Labor, real wages are falling and unemployment is growing. Youth unemployment is on the rise and the social services caseload has increased,” he said.

“For Australians who have jobs—it feels like they can’t keep ahead because their bills and mortgages keep going up.”

Taylor said economists had pointed out that almost all of Labor’s job creation has been in the public or non-market sector.

He said this left small businesses stuck with skill shortages and the public sector crowding out private businesses.

“Government spending and migration are the only things propping up the economy and the jobs market—and that is not a sign of a healthy economy,” he said.