30,600 fewer people in work amid warnings ‘easy wins’ may be over
The number of Australians in work fell for the first time in six months in April, the first full month without the JobKeeper wage subsidy, prompting warnings the nation’s stunning early recovery from the coronavirus pandemic may become a slow grind.
In figures showing a widening gap between the Victorian and NSW jobs markets, the Australian Bureau of Statistics on Thursday reported the national unemployment rate fell by 0.2 percentage points to 5.5 per cent.
Employment fell by more than 30,000 in April when the JobKeeper wage subsidy came to an end.Credit:Sam Mooy
The fall was due to a 0.3 percentage point drop in the participation rate – the number of people in work or looking for it – as the total number of people in a job slipped by 30,600.
It was the first time since September, when JobKeeper was initially reduced, that total employment fell in a month. Markets had expected a 20,000 increase in total employment.
Despite fewer people being in work in April, total employment is 45,300 above where it was in February last year ahead of the pandemic. Of that number, more than 21,000 positions are full-time.
While the nation’s two largest job markets have the same unemployment rate at 5.5 per cent, the similarities end there, with 18,500 more Victorians in work since the start of the pandemic compared to a 34,200 drop in NSW.
NSW has shed 54,900 full-time jobs, with 51,100 of those held by men. Victorian full-time employment is up by 18,300, with a fall of 7100 jobs held by men more than offset by a 25,300 jump in female full-time workers.
Victoria’s participation rate at 66.5 per cent is 1.3 percentage points higher than in NSW.
Speaking before the release of the jobs report, Prime Minister Scott Morrison said low taxes and government spending would continue to support employment.
“You’ve got to keep taxes low, you’ve got to keep rolling out the infrastructure programs. You’ve got to keep electricity prices down. You’ve got to keep the pressure on them down,” he said.
“All this is designed to get more Australians into work and it’s working. You don’t get 13.1 million Australians back in jobs on the other side of a pandemic if the policies that you’re putting in place are not working.”
Treasury had predicted up to 150,000 jobs could disappear in the months after the end of JobKeeper.
BIS Oxford Economics chief economist Sarah Hunter said the drop in employment might be due to the end of the wage subsidy, and suggested the jobs market might be tougher over the coming months.
“The print confirms that the ‘easy wins’ from re-opening the economy and the resultant rebound in activity have largely been exhausted,” she said.
“Looking ahead, the data is likely to become patchier and more ‘normal’ month to month. The May release may show more evidence of the end of JobKeeper, and the ability of workers to move from sectors with relatively weak demand to sectors which are booming will become an increasingly important factor in further increases in employment.”
Last week’s federal budget forecast the jobless rate to edge down to 5.5 per cent through the final three months of 2020-21 and to 5 per cent by the end of 2021-22.
UBS senior economist George Tharenou said the jobs market was likely to do better than expected.
“Despite the fall in employment in April, the strength in most other data and massive fiscal stimulus means we now expect the unemployment rate to fall further to 5 per cent by the end of 2021 and to 4.5 per cent by the end of 2022,” he said.
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