The unemployment rate fell by 0.1 percentage point to 3.6 per cent in September, according to the latest labour force data released by the Australian Bureau of Statistics (ABS) on Thursday.
Employment increased by 6,700 people over the month, while the number of unemployed people fell by 19,800. The market had expected a gain in employment of 20,000 and for the unemployment rate to remain at 3.7 per cent.
“The fall in the unemployment rate in September mainly reflected a higher proportion of people moving from being unemployed to not in the labour force,” commented ABS head of labour statistics Kate Lamb.
“The participation rate fell 0.2 percentage points to 66.7 per cent from last month’s record high of 67.0 per cent but remained well above levels before the COVID-19 pandemic.”
The ABS noted that the small increase in employment in September followed the large increase observed in August.
“Looking over the past two months, average monthly employment growth was 35,000 people, around the average growth we’ve seen in the past year,” Ms Lamb said.
The employment-to-population ratio fell 0.1 percentage point to 64.4 per cent, back to the average level seen in the past 12 months.
The underemployment rate fell 0.2 percentage points to 6.4 per cent and the under-utilisation rate fell 0.3 percentage points to 9.9 per cent.
Three of the big four banks had predicted that the jobless rate would come in at 3.7 per cent, with Commonwealth Bank the only outlier with a forecast of 3.8 per cent.
ANZ and Westpac had both forecast a gain in employment of 20,000 people during September, in line with market expectations, while CBA pencilled in a gain of 25,000. Meanwhile, NAB forecast that employment would rise by 30,000.
“Given elevated population growth, a number around 30k is needed to keep the unemployment rate stable,” NAB head of FX strategy Ray Attrill said ahead of the data release.
NAB had also predicted that the participation rate would remain stable on the previous month at 67.0 per cent.
“The RBA’s August SoMP had the unemployment rate averaging 3.9 per cent in Q4. A stronger outcome than we pencil in in September would put the risk firmly on the side of a ‘tighter for longer’ labour market than their last forecasts,” Mr Attrill said.
More to come.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.