Unemployment rises to 3.7%

The Australian Bureau of Statistics data showed that employment decreased around 11,000 people and the number of unemployed people increased by 22,000.

It was the second consecutive monthly fall in employment following very strong growth in 2022.

Bjorn Jarvis, ABS head of labour statistics, said that while the employment-to-population ratio fell between December and January, down 0.2 percentage points to 64.0 per cent, it was still 0.5 percentage points higher than in January 2022 and 1.6 percentage points higher than in March 2020.

Along with a larger-than-usual increase in unemployed people in January, there was also a similarly larger-than-usual rise in the number of unemployed people who had a job to go to in the future.

“January is the most seasonal time of the year in the Australian labour market, with people leaving jobs but also getting ready to start new jobs or return from leave. This January, we saw more people than usual with a job indicating they were starting or returning to work later in the month,” Mr Jarvis said.

The seasonally adjusted participation rate fell 0.1 percentage point to 66.5 per cent in January, down from the series high of 66.8 per cent in mid-2022.

Seasonally adjusted monthly hours worked decreased by 2.1 per cent, which reflected a higher-than-usual number of people taking annual leave in January.

“Early January is the seasonal peak in people taking annual leave. As in 2021 and 2022, January 2023 again saw more people than usual taking annual leave,” Mr Jarvis said.

“Around 43 per cent of employed people worked reduced or no hours because they were on leave, compared with around 41 per cent of employed people over the same period before the pandemic.”

The proportion of people away from work on sick leave was back around the average, pre-pandemic level.

The seasonally adjusted underemployment rate remained at 6.1 per cent, 0.4 percentage points below January 2022.

The under-utilisation rate, which combines the unemployment and underemployment rates, rose 0.2 percentage points to 9.8 per cent in seasonally adjusted terms.

Trend employment increased by 11,000 people (0.1 per cent) in January 2023 and trend monthly hours worked increased 0.2 per cent.

“The latest monthly increase in trend employment was around half of the monthly average for the 20 years before the pandemic, having been above the average for most of 2022,” Mr Jarvis said.