Unemployment rate rose to 7.4% in June

Marco Green
July 16, 2020

The Australian dollar slipped on the news, from 70.03 U.S. cents just ahead of the release of data.

The number of unemployed people increased by 69,300 to 992,300 in June - around a third more than the jobless numbers during the 2008 global financial crisis.

Due to the survey timeframes, the positive effects of the easing of restrictions in WA will take time to be fully reflected in the data.

Phase 3 allowed between 100 and 300 patrons in restaurants and bars; the reopening of gyms, cinemas, theatres and beauty salons; as well as the removal of the remaining regional borders.

An estimated 280,000 people returned to the workforce last month, boosting the participation rate by 1.3 points to 64 per cent.

"Looking ahead, we continue to expect weakness in the labour market, with employment to relapse in Q4, and unemployment to increase further to 8%", UBS economist George Tharenou wrote in a note.

Australia now has close to one million people without work for the first time ever, with the number unemployed now higher than 1993 when the jobless rate was in double figures.

Job vacancies in Western Australia, a leading indicator of employment, have rebounded, with daily SEEK data showing that job advertisements are nearly back to pre-COVID levels.

Among the states, New South Wales and Tasmania both had the lowest unemployment rate of 6.9 per cent, followed by Victoria (7.5 per cent), Queensland (7.7 per cent), South Australia (8.8 per cent), Western Australia (8.7 per cent).

The ACT's unemployment rate increased by 1 point to 5.1 per cent while the Northern Territory saw a big drop of 1.8 points to 5.7 per cent.

"I expect over the next few months we will see slightly contradictory data of increasing employment and unemployment, as the Commonwealth make changes to JobSeeker and JobKeeper and the full benefits of WA's easing of restrictions are captured in these reports".

Australia is facing its first recession in almost three decades with the country's central bank predicting the jobless rate will stay elevated through 2021.

'Not surprisingly given the industries that have borne the brunt of the lockdown, it was all part-time jobs that came back, largely for females and young Australians, ' she said.

The underemployment rate slipped 1.4 percentage points to 11.7 per cent and the under-utilisation rate - or the rate of people looking for more working hours - decreased 1.0 percentage points to 19.1 per cent. "This means that there is a need for government fiscal stimulus to keep going for now".

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