Labour force figures released today by the ABS show the level of employment fell by 146,300 (or 1.1 per cent) in August, in line with market expectations.
Full-time employment has decreased by 68,000 (or 0.8 per cent) over the month, while part-time employment has declined by 78,200 (or 1.9 per cent).
The fall in national employment levels was driven by a decline in employment in New South Wales of 172,800 (or 4.2 per cent).
The level of unemployment also fell, by 21,900 (or 3.4 per cent). The seasonally adjusted unemployment rate fell by 0.1 percentage points, to 4.5 per cent in August, the lowest rate recorded since November 2008.
The ABS has advised that the decrease in employment in August did not translate into a similar increase in unemployment, because a large number of people left the labour force, pushing the participation rate down by 0.8 percentage points, to 65.2 per cent.
The number of people leaving the labour force is almost entirely due to changes in New South Wales, where 165,300 people left the labour force and the participation rate fell to 62.4 per cent, the lowest rate recorded since May 2020.
The figures released today reflect the negative impact that the COVID-19 pandemic is having on global and domestic economic growth in the short-term.
They underscore while Australia’s underlying economy remains sound, the lockdowns and lockouts are having an impact. These figures reinforce the importance of sticking with the National Plan for reopening as agreed by all states and territories at National Cabinet.
The Government will continue to provide support for all states and territories, with temporary, targeted and proportionate economic and labour market assistance, specifically tailored to helping Australians navigate their way through the pandemic.
Crucially, this will help to maintain the connection between employers and employees and, in doing so, will support the economic and labour market recovery once restrictions are eased.
In addition, the Government welcomes the OECD’s recent Economic Survey of Australia, which has commended the Commonwealth’s economic response to the pandemic through stabilising the economy and maintaining the living standards of Australia’s population at a time of crisis.
Encouragingly, the OECD notes the substantial pick-up in the pace of the vaccine rollout and suggests that, once the economy reopens, household consumption could accelerate rapidly, given the high Australian stock of excess savings.
The OECD anticipates that the Australian economy will grow by 4 per cent in 2021 and by 3.3 per cent in 2022, highlighting the resilience of our economy despite the current headwinds posed by the delta variant and ongoing lockdowns.
In this regard, it is worth noting that the RBA Governor has stated that, the Delta outbreak is expected to delay, but not derail, the recovery.
Under the RBA’s central scenario, the economy should be growing again by the December quarter and is expected to be back around its pre-Delta path in the second half of 2022.