Australia’s unemployment rate fell to 5.72% in July, continuing the downward trend seen since the beginning of 2015. It now stands at the lowest level since September 2013.
But that doesn’t tell the full story about the current state of the labour market.
At 64.8%, labour market participation remains below the levels seen in previous years, while the vast bulk of the employment growth over the same period coming from part time workers.
Labour force underutilisation, combining unemployed and underemployed workers, is still elevated at 14.2%, while youth unemployment is now starting to edge higher again, rising from 12.2% in January to 13% in July.
And, as shown in the table below from Commsec, unemployment rates vary wildly across the country, ranging from just 2.7% in Sydney’s eastern suburbs to as high as 13.7% in outback Queensland.
The figures presented are annual average rates, helping to smooth out volatility in the original data presented by the ABS.
“Unemployment is historically low on average across the country. But there is still plenty of work to be done by Federal and State governments and by the Reserve Bank in generating stronger growth and thus reducing jobless rates even further,” said Craig James, chief economist at Commsec.
“Encouragingly, unemployment rates continue to improve in Tasmania and jobless rates remain low in inner city regions of Australian capital cities.
“Geelong is also telling a positive story,” he adds.
Though James’ suggests that there are some positive signs emerging, he believes that the economy is not growing quick enough right now to mop up existing labour market slack, suggesting that “too many regions have unemployment rates above 6 per cent” with “no broader signs of wage pressures apart from home building trades”.
James is calling for a further rate cut from the RBA in November to help address this problem, although admits that “some form of joint monetary-fiscal policy would be more successful in lifting growth rather than relying on each policy individually”.