Unemployment shock as jobless rate hits five-year high
Australia’s unemployment rate edged up to 4.7 per cent in September, above market expectations, as almost 40,000 jobs fell out of the economy.
Australia’s unemployment rate edged up to 4.7 per cent in September, above market expectations and the highest level in five years.
Employment decreased by 39,300, below expectations of a 20,000 increase, while the number of unemployed people climbed by 8,900, the Australian Bureau of Statistics reported on Thursday.
The softer-than-expected result continues the gradual easing trend that the labour market has been in since the start of the year.
The jobless rate in August was also upwardly revised from 4.6 per cent to 4.7 per cent.
Unemployment is at the highest level since October 2021.
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The Reserve Bank of Australia noted that labour market conditions had eased since August in a read-out of its September meeting on Tuesday.
But leading indicators suggested the outlook for labour market conditions were broadly stable, the board said.
RBA staff were also increasingly worried that the rate of unemployment needed to keep inflation stable has risen as a result of weak productivity.
That meant that to get inflation back to target, Australians might have to get used to a higher unemployment rate than previously thought.
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The participation rate fell by 0.2 percentage points to 66.8 per cent.
A higher proportion of people remained unemployed this September compared to recent years, said Sean Crick, ABS head of labour statistics.
“This follows from last month when a higher proportion of people who were previously not in the labour force moved to being unemployed,” he said.
The jobless rate has risen by 0.6 percentage points since the start of the year and is already above the RBA’s forecast of 4.5 per cent for the December quarter.
The International Monetary Fund projected Australia’s unemployment rate to hit 4.7 per cent in 2027 in its latest World Economic Outlook on Tuesday.
While the economy was proving resilient to the Middle East oil shock, vulnerabilities were growing, the fund said in a report.
Treasurer Jim Chalmers will fly to Bangkok on Thursday to join finance ministers from around the world at the IMF-World Bank annual meetings.
He will call for an end to the Middle East conflict, which is “having a devastating economic impact and is pushing up fuel prices, inflation and interest rates around the world”.
-with AAP
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