The unemployment rate has dropped sharply in a rare piece of good news from the depths of the COVID-19 recession.
Seasonally adjusted employment rose by 111,000 (0.9 per cent) between July and August, while the unemployment rate decreased by 0.7 per cent to 6.8 per cent.
“There is no doubt that this is a stunning set of job figures – especially considering that nation’s second-largest economy was in lockdown throughout the month,” said CommSec chief economist Craig James.
“More people were looking for jobs in August, more people found jobs, and more employees reconnected to their workplaces…The job programs are clearly working as intended.”
However, the effective unemployment rate is estimated at 9.3 per cent, leaving “no grounds for complacency” as JobKeeper and JobSeeker are wound down over the next six months. Victorian unemployment has risen to 7.1 per cent, decreasing by 42,000 people, while hours fell 4.8 per cent compared to an increase of 1.8 per cent across the rest of Australia.
“Getting the right balance between health and economic issues will be critical in the months ahead,” Mr James said.
“NSW is showing the way with the most jobs created or reinstated in the past three months while keeping its borders open for business and implementing effective virus testing and tracing to keep the virus in check.”
UBS still believes higher unemployment could still be ahead, noting that the increase in jobs was primarily driven by sole traders, with the peak to come in 2021. UBS is also anticipating more easing from the RBA and an extra $50 billion of fiscal stimulus.
Treasurer Josh Frydenberg said that the numbers showed that Australia’s economy “is remarkably resilient” and better than Treasury had been expecting. Treasury also revealed at the Senate COVID committee that $100 billion has now been spent on support measures, with $79 billion more to come. A total of $12.3 billion was spent on the coronavirus supplement, while $54.79 billion has been paid out in JobKeeper.