The national jobless rate was expected to edge up from 7.4 per cent in June to close to 7.8 per cent (seasonally adjusted), but the Australian Bureau of Statistics data released today showed a slight increase to 7.5 per cent.
Despite the smaller than expected rise, it was still the highest jobless rate in 22 years, with more than one million people unemployed in Australia for the first time.
State data was volatile, with Victoria’s unemployment rate dropping in July despite COVID-19 restrictions ramping up.
South Australia’s unemployment rate, the highest of all the states and territories in June, fell to 7.9 per cent – better than Western Australia and Queensland, with the latter recording the nation’s worse jobless rate at 8.8 per cent.
SA’s participation rate – which measures the proportion of people either in work or looking for employment – was unchanged.
The increase in employment came in full-time jobs, according to the ABS.
South Australian Minister for Innovation and Skills, David Pisoni, welcomed the fall in the jobless rate, against the national trend, and pointed to State Government stimulus spending as the explanation.
“We know there’s more work to be done and today’s stats, while encouraging, reflect the significant ongoing challenge ahead,” he said.
Pisoni said recent ABS wage and payroll data had shown positive signs, with SA recording a 2.4 per cent growth in wages to June – the equal highest rate in Australia.
Economists had expected the national unemployment rate to spike to a 22-year high of 7.8 per cent in July.
ABS head of labour statistics Bjorn Jarvis said employment remained more than half a million people lower than seen in March.
“The July data provides insight into the Australian labour market during stage three restrictions in Victoria. The August labour force data will provide the first indication of the impact of stage four restrictions,” he said.
BIS Oxford Economics chief economist Sarah Hunter expects employment will slip back in August as Victoria’s stage four restrictions take their toll.
“The requirement to actively seek work to continue receiving JobSeeker being reintroduced in early August, the unemployment rate is set to track higher,” Hunter said.
The Reserve Bank expects the unemployment rate to hit 10 per cent by the end of this year and still be around seven per cent in two years’ time.
The Victorian figures improved despite the State Government locking down Melbourne on July 8 in response to a wave of new COVID-19 cases.
The rise in the national jobless rate was the result of more people looking for work, even as there was a jump in the number of people employed in the month.
The ABS data shows the number of people employed in July increased by a larger-than-expected 114,700 positions.
This comprised a 43,500 rise in full-time employment and a 71,200 increase in part-time employees.
The participation rate of those in work or actively seeking employment rose from 64.1 to 64.7 per cent.
Master Builders SA said it expected the jobless rate to increase over coming months.
“These statistics are for July, and the situation in Victoria has rapidly deteriorated over the past few weeks,” said the group’s director, policy and communications, Will Frogley.
“It has been estimated the setback in Victoria will slash $10-$12 billion from the national output over the next three months –a fall of 2.5% in GDP.
“JobKeeper is really propping up the employment figures – the program has been extended from September until 28 March next year but when it switches off the damage to the economy is likely to be severe. Most economists believe the unemployment rate will hit double digits at some point.”
– with AAP
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