Australia: Lockdowns hit Australia's labor market in August
September 17, 2021
Seasonally-adjusted employment fell by a sharp 146,300 in August, following 3,100 jobs added in July. August’s result came with around 50% of the population in some form of lockdown, and was driven by a decrease in both part-time and full-time employment.
Meanwhile, the seasonally-adjusted unemployment rate fell to 4.5% in August, from July’s 4.6%, logging the lowest reading since November 2008 and markedly down from the 7.4% peak reached in July 2020. However, the seasonally-adjusted underemployment rate jumped from 8.3% in July to 9.3%. Moreover, the participation rate dropped to 65.2% from July’s 66.0%.
Commenting on the release, Robert Carnell, Asia-Pacific regional head of research at ING, stated:
“It looks clear that had it not been for the recent outbreak of the Delta variant and the steps taken to restrict its spread, Australian employment would have returned to a path projected from pre-Covid times. And while that was unlikely to have been enough to spur the Reserve Bank of Australia into aggressive action, it would have tallied with the very gradual unwinding of the asset purchasing that will get underway this month.
That process has already been slowed, with the AUD 4bn pace of asset purchasing previously due to be reviewed in November now pushed out to at least mid-February 2022. What happens then will depend partly on the spread of the virus, partly on how much vaccination progress Australia makes between now and then, and partly on whether the authorities' reaction function adjusts to living with the virus.
That is frankly too many moving parts for any conviction forecast beyond the next few months, and markets are likely to tread warily as a result.”