The seasonally adjusted unemployment rate fell by 0.1 percentage point to 4 per cent in May 2024, new data from the Australian Bureau of Statistics (ABS) revealed.
ABS head of labour statistics Bjorn Jarvis confirmed that employment rose by around 40,000 people, while the number of unemployed fell by 9,000 people, putting further pressure on a tight labour market.
“In April we saw more unemployed people than usual waiting to start work,” Jarvis said. “Some of the fall in unemployment and rise in employment in May reflects these people starting or returning to their jobs.
“While the total number of unemployed people fell by 9,000 in May, this followed a 33,000 increase in April. Unemployment was around 24,000 people more than in March, an average increase of around 12,000 people each month.
“There are now almost 600,000 unemployed people, however, that is still nearly 110,000 fewer people than in March 2020, just before the pandemic.”
As a result of the increase in employment and the fall in unemployment, the seasonally adjusted employment-to-population ratio remained at 64.1 per cent and the participation rate remained at 66.8 per cent.
"The employment-to-population ratio and participation rate both continue to be much higher than their pre-pandemic levels,” Jarvis said. “Together with elevated levels of job vacancies, this suggests the labour market remains relatively tight, though less than in late 2022 and early 2023.”
Meanwhile, seasonally adjusted monthly hours worked fell by 0.5 per cent. The growth rate over recent months was broadly in line with employment.
Some of the reduction in hours in May reflected more employed people than usual working reduced hours because they were sick.
“Similar to May 2023, around 4.2 per cent of people worked fewer hours because they were sick, compared with the pre-pandemic average for May of 3.5 per cent,” Jarvis said.
The seasonally adjusted underemployment rate remained steady at 6.7 per cent in May 2024. While the underemployment rate has risen by 0.3 percentage points since May 2023, it remained 2.0 percentage points lower than March 2020.
The underutilisation rate, which combines the unemployment and underemployment rates, also remained steady at 10.7 per cent. While this was 0.7 percentage points higher than May 2023, it was 3.2 percentage points lower than March 2020.
Roy Morgan comparison
Australian research firm Roy Morgan also released its own employment data for May 2024 this week, showing that unemployment dropped 170,000 to 1,365,000 - or 8.7 per cent of the workforce - as overall employment increased to a new record high above 14.3 million.
In addition to the decrease in unemployment, there was also a decrease in underemployment, down 256,000 to 1,338,000.
These combined decreases mean 2.7 million Australians (or 17.2 per cent of the workforce) were unemployed or under-employed in May – the lowest level of total labour under-utilisation for over a year since April 2022.
Roy Morgan CEO Michele Levine said the latest estimates bring welcome news with a record high number of jobs driving total Australian unemployment or under-employment to its lowest level in over two years at 17.2% of the workforce.
“This is the first time this year that both unemployment and under-employment have decreased in the same month with the two usually moving in opposite directions,” Levine said. “The decrease means the overall rate of labour under-utilisation (17.2 per cent) is now at its lowest for nearly two years since July 2022 (17.1 per cent, 2.52 million) as Australia emerged from the pandemic but before population growth accelerated.
“The labour force has experienced rapid change over the last year with a large increase in population (up 739,000) – a rate almost three times higher than the average annual population growth over the last 25 years of 289,000. This population increase has been the driver of a growing workforce, up by 710,000 to a near-record high of nearly 15.7 million in May 2024.
“In turn, the increasing workforce has led to a large rise in employment, up 603,000 to a new record high of over 14.3 million, and an increase in unemployment, up 107,000 to 1,365,000.
“There is good news as well with underemployment down 127,000 to 1,338,000 compared to a year ago. This means overall unemployment and under-employment is down 20,000 compared to a year ago.
Levine said the Roy Morgan figures show that although new jobs are being created, the growth in employment is making only a marginal difference to the overall level of labour under-utilisation in Australia.
“A look at the different states shows that employment growth was strongest in NSW and Queensland in May,” she added.
“One factor that appears to be driving some of the employment growth we are witnessing are the pressures brought on by cost-of-living concerns and high levels of mortgage stress – mortgage stress increased to 30.8 per cent of mortgage holders in April.
“As finances are squeezed and households need to supplement existing sources of income to keep making essential payments – including for mortgages and also payments for electricity, gas and other daily essentials – more people are being drawn into the workforce to stave off financial trouble.
“The continuing level of high unemployment and under-employment (2.7 million, over 1-in-6 Australians in the workforce) shows the labour market is struggling to provide jobs for all those joining the workforce. Tackling the persistent high level of unemployment and under-employment must be the number one priority for the Federal Government which is due to face an election during the next year.”