Unemployment in Australia it rose even higher to 6.9% in September, with 29,500 more people out of work.
For the second month in a row, Australia’s workforce exceeded expectations, although underemployment and youth unemployment continued to worsen.
After a staggering 0.7% drop in unemployment from 7.5% to 6.8% in August the Australian Bureau of Statistics release on Thursday revealed the loss of 20,100 full-time jobs and 9,400 part-time jobs in September.
Underemployment also increased 0.1% to 11.4%, despite an increase of 8.7 million hours worked. Participation decreased 0.1 points to 64.8%.
Prior to the release of the unexpectedly steady figures, Reserve Bank governor Phil Lowe said the recovery was on Australian economy “It is now on the way” but its form and nature “remain very uncertain.”
That the projected federal budget that unemployment will hit 7.25% by 2020-21 and provide more than $ 30 billion in tax concessions for businesses and $ 18 billion in income tax cuts for households to spur recovery.
In his speech at an investment conference on Thursday, Lowe questioned whether households and businesses would spend and invest after building savings buffers during the Covid-19 pandemic.
Lowe also noted the very “uneven” impact of the Covid-19 recession, with “around 500,000 people under 35 losing their jobs in the early stages of the pandemic, and around 300,000 still unemployed in August”.
The trend continued in September, with the youth unemployment rate rising 0.4 points to 14.5%. Women and men appear to be leaving the labor market at the same rate – participation fell 0.1 point for men (to 69.6%) and 0.1 point for women (to 60.1%).
Budget contains $ 4 billion in youth wage subsidies but Labor and trade unions have targeted the government for failing to support older workers and provide cheaper childcare to increase participation.
State by state, the Northern Territory took the biggest hit for employment (-5.5%) in September, followed by Victoria (-1.1%). Despite this, unemployment decreased in Victoria by 0.5%, due to a decrease in the participation rate by 1%.
The underemployment rate in Victoria of 14.9% is also significantly higher than the Australian average (11.4%), reflecting the lockdown.
Several states are adding jobs, with the number of people working increasing in Queensland (1.3%), South Australia (1%), Western Australia (0.2%) and New South Wales (0.1%).
Lowe said while the RBA had heard of a labor shortage in WA, at the other end of the spectrum, in Victoria, jobs had fallen 8% since March.
“Retail spending in Victoria in August was also 11% lower than at the start of the year – conversely, spending in other countries was up 13%,” he said.
Lowe noted that the savings rate has risen due to increased government payments and early access to pension funds that allow households to repay debt.
He said household incomes were likely to fall in the December quarter as government support became “more targeted” but argued that spending “is entirely possible” if households use the accumulated buffers.
It was “entirely right” for the government to use fiscal policy to boost the economy, Lowe said, welcoming the fact that the budget provides “further support for the economy”.
After $ 98 billion in new spending in the budget and public debt was set to $ 1 trillion, Lowe said the debt was “fully manageable” because of the lowest interest rates in history.
The workforce is capitalizing on the results of work, with its employment spokesman, Brendan O’Connor, warning that employer wage subsidies will end in March and “more jobs” will likely be lost.
The president of the Council of Trade Unions of Australia, Michele O’Neil, said the Morrison government had “cut critical support payments” by cutting back on coronavirus jobs and supplements in September.
“Now is not the time for the government to cut back – 160,000 workers are expected to lose their jobs between now and the end of the year,” he said. “The government needs to recommit to supporting these workers and start creating safe jobs to lift the economy out of recession.”