MNI DATA IMPACT: Australia Unemployment Up, Participation Down

By Lachlan Colquhoun

     SYDNEY (MNI) - Australia's unemployment rate edged higher in October, up to

5.3% from 5.2% in September, data released Thursday by the Australian Bureau of

Statistics showed. The rate was at a decade low of 4.9% in February.

     Here are other points of interest in the ABS Labor Force Survey.

Employment down: Employment has consistently moved higher over 2019, but

contracted by 19,000 in October, the biggest drop in three years. Full-time

employment fell by 10,300 and part time by 8,700. 

Underemployment still high: The underemployment rate is now closely watched as

an indicator of capacity in the labour market, and came in at 8.5% today, up

from 8.3% in September. This means that 13.8% of the Australian workforce is

either unemployed, or wants to work more hours.

Participation rate falls: The participation rate has been at record highs, which

is why the unemployment rate has moved higher in recent months despite increases

in employment. The rate for October dipped to 66.0% from 66.1% in September.

Monetary policy implications: The Reserve Bank of Australia kept official

interest rates steady at 0.75% in November, after cutting three times earlier

this year. The Bank has begun to talk of a "gentle recovery" helped by its

monetary stimulus, but today's data along with underwhelming wages data

yesterday undermines suggestion of a recovery. The RBA has made "full

employment" a priority and the current state of the labour market will be a

major agenda item when the Bank's board meets again on December 3.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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