Unemployment in Australia has surprisingly improved, shaking off fears that Victoria’s COVID-19 lockdown would cause more people to be unemployed.
Unemployment fell to 6.8 percent in August, with the total number of unemployed people falling by 87,000 over the period, shown by latest labour force statistics by the Australian Bureau of Statistics.
In July, unemployment reached a 22-year high of 7.5 percent, with a number of economists expecting the figure would worsen due to stage 4 lockdown measures imposed in Victoria.
Only 0.1 percentage points was improved on the participation rate over the month.
ABS head of labour statistics Bjorn Jarvis said women accounted for about 55,000 of those coming out of unemployment last month.
“With participation relatively unchanged, the increase in employment and decrease in unemployment saw the unemployment rate decrease 0.7 percentage points to 6.8 percent,” Mr. Jarvis said.
Treasurer Josh Frydenberg said the figure was significantly better than market expectations.
“We recognize that despite this fall today in Australia’s official unemployment rate, many Australians are doing it tough, and the road to recovery will be long,” he said.
“What you can take away from these numbers are more people are getting back to work.”
The effective unemployment rate, which includes people that are unemployed and those on zero hours, fell from 9.8 percent to 9.3 percent.
Employment in Victoria dropped, with 42,400 fewer jobs in the state compared with the previous month.
The state’s unemployment rate is sitting at 7.1 percent, which is higher than the national average.
Mr. Frydenberg said the Federal Government had proposed some ideas around the easing of restrictions, which would be discussed at National Cabinet on Friday.
Market consensus for the monthly jobs decline was 35,000, but economists were expecting the figures to be higher.
ANZ was expecting a fall of 50,000, with the unemployment rate to rise to 8 percent.
Commsec said its survey forecast was 7.7 percent, but instead, the biggest monthly fall in the jobless rate in 32 years was achieved.
“There is not doubt that this is a stunning set of job figures – especially considering that the nation’s second largest economy was in lockdown throughout the month,” it said.
“There will be bumps on the road ahead. However, the hope is that the unemployment rate will now peak well below official forecasts of near 10 percent.”
“In fact, for this to occur at least 400,000 jobs would have to be shed by year end – unlikely with Victoria’s restrictions being eased.”
AMP said the headline unemployment rate was understating the level of weakness in the labour market, the truer measure being the effective unemployment rate.
Westpac economist Justin Smirk said employment would need to collapse and between 400,000 and 500,00 jobs lost to meet the Reserve Bank’s forecast of 10 percent unemployment.
“Without a doubt, the recovery in the rest of the country has been more robust than we thought, while the hit to the Victorian labour market was not as bad as expected,” he said.
Mr. Smirk also flagged the tapering of support measures such as JobKeeper could fuel a further decline in employment levels.
The pandemic has hurled the country into the worst economic recession – two quarters of negative growth – since the Second World War, with gross domestic product of June quarter sliding by 7 percent.
In the daily charts of AUD/USD, the price opened at 0.731 on Friday morning Asia session.
The Aussie dollar has been struggling to edge up due to the ongoing recession and trade issue with China that has yet to be resolved and won’t be anytime soon.
We can see that the highest price at the resistance is yet to be broken and the price is trading inside the support and resistance area levels. Speculations of the price bouncing inside this area.
Breaking out from the support area is likely to happen anytime soon due to the negative results of other economic data’s being released from Australia. AUD/USD bears are sitting idly in this support at 0.7214 waiting for that opportunity to short their positions.
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