Australia's unemployment rate is around 5% but that's not reflective of job market conditions across the country - here's proof

Matt King/Getty ImagesAustralian PM Scott Morrison enjoying the footy following the Coalition’s election victory in May 2019.
  • Australia’s unemployment rate currently sits at 5.2%.
  • By state, unemployment ranges from just 4.5% in New South Wales to as high as 6.8% in Tasmania. The variance in joblessness is even wider from a smaller geographical perspective.
  • According to CommSec, the Sutherland SA4 region, located in southern Sydney, had the lowest average unemployment rate nationally at just 1.9% over the past year. Outback Queensland had the highest average unemployment rate over the same period.
  • CommSec says the government “must continue to focus on infrastructure spending and population policies” to help lower unemployment across the country.

Australia’s unemployment rate, according to the Australian Bureau of Statistics (ABS), currently sits at 5.2%. It was also as low as 4.9% in February, at the time the lowest level in eight years.

However, depending on where you live, that’s unlikely to be reflective of how strong or weak the jobs market is in your neck of the woods.

By state, unemployment ranges from just 4.5% in New South Wales to as high as 6.8% in Tasmania. With the exception of Victoria at 4.9%, no other state has an unemployment rate of less than 5.9%, according to latest data.

There are obviously big variations across the country right now when it comes to finding work, including from a smaller geographic perspective.

These two tables from CommSec underline that point.

Commsec

The first shows the 15 SA4 regions scattered across the country with the lowest average unemployment rate in the year to April. Unsurprisingly, 14 are located in New South Wales and Victoria, not only the states with the lowest rates of joblessness nationally but also home to the capital cities with the lowest unemployment levels in the country, Sydney and Melbourne.

For clarity purposes, there are 107 SA4 regions located across the country. Generally, most contain more than 100,000 people, especially in metropolitan areas where they often have populations of between 300,000 to 500,000. In the ABS labour force report, information is collated on unemployment levels in 87 SA4 regions.

Over the past year, the Sutherland SA4 region, located in southern Sydney, had the lowest average unemployment rate nationally at just 1.9%. At the northern end of Sydney’s coastline, the Northern Beaches recorded the second-lowest rate of joblessness over the same period at 2.5%.

Four of the remaining seven SA4 regions with the lowest unemployment rates were also located in Sydney during the past year.

ABS

At the other end of the spectrum, the news for jobseekers in outback Queensland was not as good, recording the highest average unemployment nationally at 14%, nearly five percentage points higher than Moreton Bay North in Queensland, the region with the second-highest level of joblessness over the past year.

Five of the six regions with the highest unemployment rates were located in the sunshine state, with the remainder found predominantly in South Australia and Western Australia.

According to CommSec, 58 of the 87 SA4 regions tracked had lower unemployment levels in the past year compared to the average level of the past decade.

While unemployment levels nationwide are, from a broad perspective, lower than what was seen over the past decade, Craig James and Ryan Felsman, economists at CommSec, said there’s grounds for both the RBA, and more so the government, to do more to help lower joblessness across the country.

“Rate cuts can only do so much in stimulating the economy and getting the jobless rate down. Arguably one or two rate cuts may only have a modest effect in lifting economic growth given that rates are already historically low,” they said in a note released on Monday.

“State and Federal Governments must continue to focus on infrastructure spending and population policies to lift economic momentum more broadly across the country.

“Fortunately with state and federal budgets generally in good shape, fiscal policy can be directed to job creation rather than fiscal consolidation.”

As things currently stand, financial markets see the prospect of a 25 basis point rate cut from the RBA next month as a near-certainty. That view is almost universally shared by economists polled by Bloomberg.

Both groups also see the RBA delivering a follow-up 25 basis point cut later in the year, with the risk of another 25 basis point reduction in the cash rate by the second half of next year, potentially seeing it fall to 0.75%, currently deemed to be a line-ball call.

While the RBA is expected to deliver additional monetary policy stimulus in the months ahead, Australian Treasurer Josh Frydenberg pushed back against growing calls for additional fiscal stimulus beyond what’s already been legislated or tabled, telling the Australian Financial Review late last week that the government has the “right economic plan to see us through these challenging times”.

“Not only are we growing the economy but we are repairing the budget and that’s an important part of our economic plan,” he said.

NOW READ: Australia’s budget may be in surplus a year earlier than forecast

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