Australia’s jobless rate hovered at 13-year lows last month even as disruptions from the Omicron Covid strain kept staff at home, slashing hours worked by many.
The country’s unemployment rate was 4.2% in January, unchanged from December when the measure sank to a 13-year low, the Australian Bureau of Statistics said on Thursday. The result was in line with market economist forecasts.
The economy added 12,900 workers and the participation rate edged 0.1 percentage points higher to 66.2%.
Most notable though was the slump in time worked, with hourly employment sinking a seasonally adjusted 8.8% or 159m hours.
NSW and Victoria, which saw the sharpest spike in Covid cases and the related furloughing of workers and close contacts, led the drop in hours worked, diving 13.5% and 13.2%, respectively. Western Australia, which maintained its border restrictions, posted a 1.7% increase in hours worked.
The drop in hours was the most since April 2020, during Covid’s first wave. CBA said the reduction in NSW was a record decline.
Queensland led states in jobs added, with 17,400 more positions in January ahead of WA’s 8800. NSW shed 22,800 jobs, while Victoria’s lost 8800.
As for jobless rates, Victoria’s 4.07% in seasonally adjusted terms was the lowest on record for that state, the ABS said. The ACT had the nation’s lowest rate at 3.2% ahead of WA at 3.7% and Tasmania and Northern Territory both at 3.8%.
South Australia, which goes to the polls next month, had the highest unemployment rate at 4.8%, with Queensland at 4.4% and NSW on 4.2%.
Bjorn Jarvis, head of ABS’s labour statistics unit, said a 4.9% drop in hours worked in January 2021 had mostly reflected people jumping at the chance to grab annual leave after lockdowns eased. This year though, the 8.8% drop reflected Covid-related sick leave.
“Nationally, and in New South Wales and Victoria, the number of people who worked reduced hours because they were sick was around three times the pre-pandemic average for January,” Jarvis said.
“January is the middle of summer and usually only about 90,000 to 100,000 people in Australia are away from work sick for an entire week,” he said. “In January 2022 it was about 450,000 people [or] 3.4% of employed people.”
CBA economist, Stephen Wu, said the jobs figures were likely understating the strength and tightness of the labour market, and added to mounting evidence of rising wages growth.
The ABS will release the December quarter wage price index on 23 February and the CBA forecasts it to have increased by 0.8% compared with the previous three months, taking the annual rate of wages growth to 2.4%.
The Australian Chamber of Commerce and Industry chief executive, Andrew McKellar, said the continued jobs growth last month was “a very reassuring sign”.
“It’s clear businesses have worked hard to retain their employees despite difficult circumstances, which is demonstrated by stability in the unemployment rate and further increase to jobs numbers,” McKellar said.
“The ultra-low unemployment figures make clear that further emphasis is needed to boost workforce participation,” he said, adding that this should include more investment in skills and the establishment of “an ambitious skilled migration program to plug widespread workforce shortages”.
