There were still 235,000 fewer people in full-time work in October than compared to February. Total employment, including part time work, is 226,000 down on its pre-virus peak.
The unemployment rate rose marginally in October, to 7 per cent. Both Treasury and the Reserve Bank believe the jobless rate would peak by year’s end around 8 per cent but that now seems unlikely.
In both South Australia and the ACT total employment is above its pre-virus level. Despite its large gain in October, Victoria’s jobless rate is at 7.4 per cent while there are 131,200 fewer people in work in the state than in February.
NSW’s unemployment rate fell by 0.7 percentage points to 6.5 per cent while it increased in Queensland to 7.7 per cent. The ACT has the nation’s lowest jobless rate at 3.9 per cent.
While the jobs numbers were much stronger than expected, the ABS reported the number of unemployed increased by 25,500 to reach 960,900. It is the third highest monthly number on record, only behind June and July this year when there were one million people out of work.
Youth unemployment also increased by a full percentage point to 15.6 per cent and is now 3.1 percentage points higher than a year ago.
Treasurer Josh Frydenberg said the figures showed the economic recovery was gaining momentum.
“The road ahead will be long, will be hard, it will be bumpy. It will not be without its challenges, as we see in South Australia today. But there is a light at the end of the tunnel,” he said.
But shadow employment minister Brendan O’Connor said the government’s decisions to reduce the JobKeeper wage subsidy and the COVID supplement for people on JobSeeker meant unemployment would remain higher for longer.
“The Prime Minister has been slow to act during this crisis, and his government’s deliberate decision to exclude Australians from support means the only lasting legacies of this crisis could be higher unemployment for longer and a trillion dollars of debt,” he said.
AMP Capital senior economist Diana Mousina said it appeared the jobs market was recovering quickly from the COVID-19 shock with about 75 per cent of all jobs regained.
But she cautioned the number of hours worked is well short of its pre-virus levels while under-employment remained hight.
“There are also still some people who are working zero hours (and being supported by JobKeeper) or are working much fewer hours and this will be the most challenging part of the economy to get back to ‘normal’,” she said.
“This spare capacity will continue to keep wages growth low.”
Data this week showed wages are now growing at their slowest rate on record with private sector wages up by 0.2 per cent over the past 6 months.
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.
Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.