Driven by a decrease in employment, the ABS has revealed a lift in the unemployment rate to 3.7% in January.
The uptick in unemployment to start the new year was driven by employment decreasing by 11,000 people, while the number of unemployed increased by 22,000 people.
- The unemployment rate has risen to 3.70%, defying major bank economists' forecasts.
- The RBA's latest Statement of Monetary Policy anticipated the unemployment rate to hit 3.75% by December 2023.
- The number of employed Aussies decreased 11,000 in January, with unemployment increasing by 22,000.
ABS Head of Labour Statistics Bjorn Jarvis detailed this was the second consecutive monthly fall in seasonally adjusted employment but followed very strong growth during 2022.
"January is the most seasonal time of the year in the Australian labour market, with people leaving jobs but also getting ready to start new jobs or return from leave,” Mr Jarvis said.
“This January, we saw more people than usual with a job indicating they were starting or returning to work later in the month,"
The Reserve Bank’s Statement of Monetary Policy (SOMP) released last week, revealed the expectation for the unemployment rate to remain around 3.5% until mid-2023, before rising as growth in output slows.
The print of 3.7% released Thursday by the ABS remains ahead of many forecasts, given the RBA anticipates a 3.75% unemployment rate by December 2023.
Major bank economists remained in consensus with one another, forecasting the unemployment rate to remain steady at 3.5% for January.
In terms of hours worked throughout January, the ABS detailed a 2.1% decline, reflected by a higher-than-usual number of people taking annual leave in January.
"Early January is the seasonal peak in people taking annual leave. As in 2021 and 2022, January 2023 again saw more people than usual taking annual leave,” Mr Jarvis said.
“Around 43% of employed people worked reduced or no hours because they were on leave, compared with around 41% of employed people over the same period before the pandemic.”
Further, the ABS detailed seasonally adjusted underemployment rate remained steady at 6.1%, 0.4 percentage points below January 2022.
The underutilisation rate, which combines the unemployment and underemployment rates, rose 0.2% to 9.8% in seasonally adjusted terms.
"Unemployment rate lifts to 3.7% to kick off the new year" was originally published on Savings.com.au and was republished with permission.