We know the RBA is hellbent on lowering unemployment so that wages eventually start increasing.
And to do that they are prepared to lower interest rates even further and even take unprecedented measures such as quantitative easing
So what is actually happening to unemployment?
Different to the ABS figures the latest Roy Morgan stats suggest in September 1.2 million Australians were unemployed (8.7% of the workforce) with an additional 970,000 (7.0%) now under-employed.
The workforce, which comprises employed Australians and those who are unemployed and looking for work, has increased year-on-year by 416,000 to 13,836,000.
The increasing workforce was driven entirely by an increase in full-time employment as unemployment and part-time employment fell;
Employment was up 470,000 to 12,634,000 in September 2019 – the rise in employment was driven by a significant increase in full-time employment of 773,000 to 8,467,000.
However, over the past year part-time employment has declined by 303,000 to 4,167,000;
Unemployment was down 54,000 on a year ago to 1,202,000 Australians and the unemployment rate is down by 0.7% to 8.7%.
In addition under-employment is down by 155,000 to 972,000 Australians (down 1.4% to 7% of the workforce) over the past year which includes Australians working part-time and looking for more work;
Roy Morgan’s unemployment figure of 8.7% for August is higher than the current ABS estimate for August 2019 of 5.3%, although the gap between the two measures is closer than usual.
Roy Morgan’s under-employment estimate of 7% is now slightly below the current ABS under-employment estimate of 8.6%;
Roy Morgan’s total unemployment and under-employment of 2,174,000 Australians (15.7% of the workforce) in September, down 209,000 on a year ago, is larger than figures usually proffered, but the biennial ABS survey the ‘Barriers and Incentives to Labour Force Participation’ last released in 2017 claims a much higher figure of 2.7 million Australians would like a job or to work more hours – including 1.1 million people the ABS said wanted a job but are excluded from the Labour Force.
Source: Roy Morgan Single Source October 2005 – September 2019. Average monthly interviews 4,000.
Michele Levine, CEO Roy Morgan, says strong jobs growth over the last year has helped drive down both unemployment and under-employment, however over 2 million Australians are still looking for work or looking for more work:
“Roy Morgan’s data shows real unemployment and under-employment is at 2.17 million in September, representing 15.7% of the workforce. This marks a significant improvement over the last year with the measure declining 2.1% points following strong full-time jobs growth.
“However, despite these positive signs, real unemployment and under-employment has now marked four straight years above 2 million, stretching back to September 2015 (1.99 million – 15.6%).
“The interest rate cuts in June and July as well as significant income tax cuts legislated in recent months appear to have stabilised the economy after a rough start to 2019. The RBA’s decision to cut interest rates to a record low of only 0.75% in October will also provide additional stimulus.
“It’s also worth noting the RBA doesn’t have much room for further interest rate cuts in the remainder of this year and heading into 2020. There are several candidates to increase economic uncertainty in the next few months include the US-China trade war, a messy Brexit ‘divorce deal’ between the UK and the EU or even a risk of conflict in the Middle East.
“If any of these were to escalate over the next year, the RBA, as well as the Federal Government, would have to consider more unconventional means to ensure the Australian economy keeps growing and providing jobs for an increasing population.
“Contact Roy Morgan to learn more about Australia’s unemployed and under-employed, who and where they are, and what challenges they face as they search for employment opportunities.”
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