Unemployment falls as 40,300 Aussies find work

Australia’s unemployment rate has dropped to 4.4 per cent in May, down from 4.5 per cent the previous month.

The seasonally adjusted figures showed there were 40,300 more employed people, according to new data released by the Australian Bureau of Statistics (ABS) on Thursday.

Of the cohort of new workers, 35,000 were part-time and 5000 were full-time.

ABS head of labour statistics Sean Crick said the rise in employment is due to a backlog of jobseekers entering the workforce.

“Over the past few months, we have recorded higher proportions of unemployed people waiting to start jobs who then remained unemployed in the following month,” he said.

“The backlog of people waiting to start a job has eased in May, contributing to the 40,000 rise in employment and 18,000 fall in unemployed persons.”

Thursday’s figures were welcome news after the market was shocked by a surprise rise in unemployment to 4.5 per cent in April – the highest figure since late 2021.

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Economists and major banks have, however, forecast the unemployment rate to approach 5 per cent over the coming year.

While the number of employed people grew, the total number of hours worked decreased by 1.1 per cent after a 0.9 per cent rise last month.

“In April, less people took leave during the Easter holiday period and instead worked their usual hours, contributing to non-seasonal strength in hours worked,” Crick said.

“The fall this month brings hours worked back in line with employment growth since the end of the pandemic in June 2022.”

The jobs figures come after fresh inflation data released on Wednesday showed the consumer price index unexpectedly slowed to 4 per cent in the 12 months to May – the lowest level in three months.

The Reserve Bank of Australia will hand down its next interest rates decision in August after holding rates at 4.35 per cent last week.

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BNY macro strategist Wee Khoon Chong warned there is no room for complacency and signalled there could be more rate hikes to come, although added the fresh jobs data is unlikely to change the RBA’s thinking.

“The Australian economy remains resilient,” he said.

“Similar to yesterday’s inflation data, the numbers are unlikely to shift the RBA from its current wait-and-see stance in the near term, though they reinforce the view that further policy tightening remains possible before year-end.”

Treasurer Jim Chalmers said the fresh data showed the economy remained strong in the face of global uncertainty.

“This is a very welcome reminder of the strength of our labour market and the resilience of our economy in the face of all this global uncertainty,” he said in a statement.