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For the first time in two years Australia’s unemployment rate has surpassed 4 percent and this labour market cooling warrants close monitoring, according to RSM Australia Economist Devika Shivadekar.
Over the past three years, January has consistently shown surprising employment trends, largely influenced by individuals taking leave or anticipating new job opportunities during the month, Ms Shivadekar said.
“There's a growing concern about the economy possibly weakening at a faster pace than expected, she said.
“While the steady participation rate is a positive sign, the subdued employment growth warrants close monitoring.
“The Reserve Bank of Australia (RBA) is tasked with maintaining full employment and managing inflation as part of its dual mandate. If unemployment continues to rise in the coming months, it might compel the central bank to consider easing measures earlier than anticipated before inflation is well and truly under control.”
RSM Australia Chief Executive Partner Jamie O'Rourke said businesses are likely to be scaling back their hiring, as evidenced by the muted growth in employment gains and the rising underemployment rate.
Key ABS Statistics (seasonally adjusted, January 2024):
- unemployment rate increased to 4.1%.
- participation rate remained at 66.8%.
- employment increased to 14,201,300.
- employment to population ratio decreased to 64.1%.
- underemployment rate increased to 6.6%.
- monthly hours worked decreased to 1,871 million.
- full-time employment increased by 11,100 to 9,797,800 people.
- part-time employment decreased by 10,600 to 4,403,500 people.
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