The latest official labour market data clearly contradicts recent reports of an early and robust post-lockdown revival in the economy.
The ABS has revealed that the national unemployment rate seasonally adjusted increased sharply over October – rising from 4.6% to 5.2% and the highest monthly result since April
46,300 jobs were lost over October with the number of unemployed increasing by 81,100 over the month.
Since covid lockdowns impacted the national economy in July, the number of employed has decreased by 333,703 with the number of unemployed increasing by 68,341.
The workforce has also fallen through lockdown as workers gave up looking for work and left the labour market – falling by 265,362 – and this includes a rise of 35,494 over October.
The shrinking labour market has however acted to flatter the unemployment rate. If the workers who have abandoned the labour force recently were counted as unemployed – the unemployment rate would currently stand at 7.5%.
As the economy recovers following the end of lockdowns, recently discouraged workers will return in strength to the labour market seeking employment. This will however place upward pressure on the unemployment rate unless new jobs can be found to match the level of rising demand for work.
Plenty of optimism around the labour market prospects for the post-lockdown national economy, particularly from the RBA – but clearly still some hard work and uncertainty remain.
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