Removal Of Lockdowns Boosts Participation & Unemployment

The headline fall in unemployment provided a marginal beat vs. the expectation for a 50K drop, printing at -46.3K. The unemployment rate saw a larger than expected uptick, moving to 5.2% vs. expectations of 4.8%, with the participation rate ticking up to 64.7% (exp. 64.8%). Underemployment nudged higher (to 9.5%), with underutilisation also up during October (14.7%), as both metrics edged further away from their recent troughs.

• The ABS noted that "the latest data covered the period from 26 September to 9 October. This included school holidays and some early changes to restrictions associated with the Delta lockdowns, particularly in New South Wales, ahead of larger changes from mid-October."
• "As we've seen throughout the pandemic, the changes in the labour markets with lockdowns continued to have a large influence on the national figures. There was early recovery in New South Wales, with their participation rate increasing by 0.8 percentage points in October. This was underpinned by increases in both employment (22,000) and unemployment (35,000), with their labour force increasing by around 57,000 people. However, it was still 218,000 people lower than in May. In contrast, while Victoria's unemployment also increased, by 29,000 people, employment fell by a further 50,000, with their participation rate falling by 0.4 percentage points. The Victorian labour force was 113,000 people lower than in May."
• "This was the first increase in the participation rate since June 2021, reflecting a large increase in unemployment (82,000 people). The increases in unemployment show that people were preparing to get back to work, and increasingly available and actively looking for work - particularly in New South Wales, Victoria and the Australian Capital Territory. This follows what we have seen towards the end of other major lockdowns, including the one in Victoria late last year. It may seem counterintuitive for unemployment to rise as conditions are about to improve. However, this shows how unusual lockdowns are, compared with other economic shocks, in how they limit being able to work and look for work."