Australia's unemployment rate printed at 3.9% in April to stand at its lowest level in 48 years. The strong economic expansion from the pandemic has driven employment and hours worked to more than 3% above their pre-Covid levels, leading to the tightest labour market conditions in many years.
Labour Force Survey — April | By the numbers
- Employment lifted by a net 4k in April, coming in below the consensus estimate of 30k and down from March's 20.3k rise (revised from 17.9k).
- National unemployment met expectations printing at 3.9%. Unemployment in March was initially reported at 4% but was revised to 3.9% in today's report.
- Participation eased from 66.4% to 66.3% but remains around record highs.
- Hours worked rebounded by 1.3% in the month following the 0.3% fall in March (revised from -0.6%) during the east coast floods.
Labour Force Survey — April | The details
Australia's unemployment rate declined to 3.85% in April, its lowest since the fourth quarter of 1974. This has been an extraordinary recovery from the depths of the pandemic when unemployment hit its peak at 7.48% in June 2020.
Underemployment (6.1%) and overall underutilisation in the labour market (10%) continued to fall in April, with both measures at their lowest levels since 2008. At the outset of the pandemic, underemployment surged to peak at 13.8% and underutilisation rose above 20%.
Net employment came in well below expectations rising by just 4k in April. The timing of the Easter and school holiday periods make it difficult to draw many conclusions into April's outcome. Part-time employment fell by 88.4k in the month, its weakest outcome since the Delta lockdowns, and that could have been driven by seasonality. In contrast, full-time employment lifted sharply by 92.4k. Total employment is now 3.1% above its pre-Covid level and labour demand remains strong.
Hours worked rebounded sharply by 1.3% in April after falling in March due to the disruptions from wet weather. The two states affected by flooding drove this increase, with hours worked rising by 2.5% in New South Wales (from -1%) and by 3.3% in Queensland (from -1.7%). This lifted hours worked in April to 3.6% above their pre-Covid level.
The ABS's detailed data showed that the surge in the number of Australians working fewer hours than usual in March due to bad weather reversed in April, driving the increase in total hours worked. However, an uptick in Omicron cases led to a rise in staff absences in the month, while the number of people taking annual leave lifted into Easter, with both of these factors preventing an even stronger increase in hours worked in April.
On the supply side, labour force participation declined modestly from 66.4% to 66.3%. Victoria was the only state that reported a rise in participation (67.4%). The broad-based nature of the decline in participation suggests that seasonal effects could have been at play. Nonethless, the participation rate remains around record highs and the share of Australians in work has never been higher (63.8%).
Labour Force Survey — April | Insights
A historic report with Australia's unemployment rate falling to a 48-year low. It is pleasing to see the lows in unemployment that were posted prior to the financial crisis have finally been taken out, something that a long economic expansion between mid 2009 to early 2020 was unable to achieve, with the unemployment rate averaging around 5.5% over this period. Elevated job vacancies indicate that labour demand remains strong and that should be able to keep unemployment declining for a while yet.