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15,000 people lost their jobs in December as labour market tightens

Australia lost around 15,000 workers in December as the unemployment rate stayed steady at 3.5 per cent.

15,000 people lost their jobs in December as labour market tightens
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The Australian Bureau of Statistics data showed that the number of unemployed people increased by 6,000 at the end of 2022 while the participation rate fell 0.2 percentage points to 66.6 per cent.

Lauren Ford, head of labour statistics at the ABS, said despite the slight fall from its historic high, the participation rate actually finished the year 0.8 percentage points higher than its pre-pandemic level.

Seasonally adjusted employment decreased by 15,000 people (0.1 per cent) in December 2022, following an increase of 58,000 people in November and average monthly growth of around 40,000 people between August and November 2022.

The employment-to-population ratio also decreased, down 0.2 percentage points to 64.3 per cent. In historic terms, it continued to remain elevated, 1.9 percentage points above the pre-pandemic level.

The data also revealed that hours worked have decreased for the second month, down 0.5 per cent.

“The falls in employment and hours worked in December followed strong growth through 2022, with an annual employment growth rate of 3.4 per cent and hours worked increasing by 3.2 per cent,” Ms Ford said.

“The strong employment growth through 2022, along with high participation and low unemployment, continues to reflect a tight labour market.

Even though hours worked grew during 2022, there continued to be more people than usual working reduced hours due to illness.

“In December, we saw the number of people working reduced hours due to illness increasing by 86,000 to 606,000, which is over 50 per cent higher than we would usually see at this time of the year,” Ms Ford said.

The seasonally adjusted underemployment rate rose 0.2 percentage points to 6.1 per cent, 2.7 percentage points below the pre-pandemic rate.

The under-utilisation rate, which combines the unemployment and underemployment rates, rose 0.3 percentage points to 9.6 per cent in seasonally adjusted terms. This was 4.4 percentage points below March 2020.

Marcel Thieliant from Capital Economics told the Sydney Morning Herald that the 3.4 per cent jobless rate recorded in October will be the low point for unemployment.

“The labour market struggled in December and it won’t be long before unemployment starts to rise in earnest, he wrote in a note.

“Looking ahead, employment surveys remain consistent with jobs growth of around 20,000 per month. However, the labour force has been rising more rapidly than over the last few months [than] as net migration has hit record highs.

“Indeed, job vacancies have fallen for two consecutive quarters, while skilled vacancies have fallen by around 10 per cent from their peak in June.”

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