Australian unemployment figures disappoint again as economists warn this year will get worse

John Pryke/Getty Images
  • Australia’s latest unemployment figures remain unchanged at 5.2 per cent, it’s highest level since August 2018.
  • Despite an increase of new jobs for the month of May, few were actually permanent positions.
  • At the same time, jobs site Seek is reporting a sharp decline in job advertisements over the last two months.
  • AMP Capital chief economist Shane Oliver reckons the figures indicate unemployment will rise to 5.5% by the end of the year.

If you’re hunting for a job right now with little success, you’re not alone.

The labour participation rate — the percentage of Australians with a job or looking for one — is at a record high. But economists are sounding the alarm on the overall economy as job growth keeps slowing.

Thursday’s Australian Bureau of Statistics (ABS) figures show that despite 42,000 new jobs being created in the month of May, Australian unemployment remains stalled at 5.2% – its highest level since August 2018.

Of those, just 2,400 were full-time roles, with the federal election being credited for creating a tranche of temporary work.

That’s only set to exacerbate concerns heading into June and the second half of the year as those roles disappear.

Tweeting the news, AMP chief economist Shane Oliver said he expected unemployment to worsen and the Reserve Bank of Australia (RBA) to cut the cash rate accordingly.

At the same time, the participation rate is at an all-time high as more Australians look for a job.

“Australia’s participation in the labour force continues to rise with the participation rate up 0.4 percentage points over the past year to an all-time high of 65.9%,” ABS chief economist Bruce Hockman said.

“The participation rate for people aged 15-64 also climbed to a record rate of 78.4%, with a record 74.3% of people in this age group employed,” Mr Hockman said.

However, those looking for work will be disappointed to find a sharp decline in the number of jobs advertised in the last two months, according to jobs site Seek.

“It has been interesting to see that job ad volumes have moderated in May after a pronounced drop in April,” Seek Australia and New Zealand managing director Kendra Banks noted.

“We suspected that April advertising was heavily impacted by multiple public holidays and the lead up to the Federal election, and our data has verified this hypothesis.”

While Banks said Seek was seeing strong job growth across the education, training, healthcare, and medical sectors, this year was down sharply from 2018.

“While May job ad volumes are still down from 2018 it is important to note that 2018 was somewhat of an anomaly with the highest job ad volumes in the past decade.”

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