Business

Australia sees more jobs lost to lockdowns, but recovery beckons

Article content

SYDNEY — Australian employment fell sharply for a second month in September as coronavirus lockdowns forced firms to lay off workers, while the jobless rate was held down by another big drop in the number of people looking for work.

Policy makers are counting on a recovery in coming months as rapid progress in vaccinations has allowed restrictions to ease in Sydney, with Melbourne and Canberra soon to follow.

Relief was sorely needed with Thursday’s data from the Australian Bureau of Statistics (ABS) showing employment fell by 138,000 in September, on top of a 146,100 drop in August.

Advertisement

Article content

The jobless rate edged up to 4.6%, from 4.5%, but has been artificially held down by the restrictions which prevent people looking for work and being counted as unemployed.

“The low national unemployment rate continues to reflect reduced participation during the recent lockdowns, rather than strong labor market conditions,” said Bjorn Jarvis, head of labor statistics at the ABS.

The participation rate fell 0.7 percentage point in September to 64.5%, a long way from a record high of 66.2% hit in June. As this shift unwinds, the unemployment rate could well rise in the next few months even as employment recovers.

The Reserve Bank of Australia (RBA) has cautioned that unemployment will likely top 5% by year end, though it is optimistic activity will pick up quickly as the lockdowns ease.

Advertisement

Article content

The central bank still believes the jobless rate will need to get down to 4% or lower to drive a sustained, and much needed, lift in wages and inflation.

Speaking on Thursday, RBA Deputy Governor Guy Debelle noted that while the labor market had enjoyed a strong recovery ahead of the lockdowns, wages remained stubbornly subdued with very few workers getting annual rises over 2%.

The RBA has long argued pay growth above 3% was needed to get inflation into its 2-3% target band, after years of undershooting.

Debelle said the lack of a pick up in wages and inflation meant Australia did not have to follow some other developed nations in paring back policy stimulus.

Markets have recently started to wager the RBA might hike interest rates late next year, while the bank itself continues to say a move is unlikely until 2024. (Reporting by Wayne Cole Editing by Shri Navaratnam)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Share this news on your Fb,Twitter and Whatsapp

File source

NY Press News:Latest News Headlines
NY Press News||Health||New York||USA News||Technology||World News

Tags
Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close