Employment up; Unemployment Rate down…what impact JobKeeper?

Employment in April fell by 30,600, although full-time positions were up 33,800. Despite the drop in total employment a sharp dip in Participation (to 66.0) saw the headline unemployment rate drop to 5.5% (after March was revised up to 5.7%). Year-on-year comparisons will look bizarre for the next few months as we start to compare to the heavily  COVID-impacted months through to the middle of last year; thus the annual rate of employment growth has jumped from +0.6% in March to +5.1% now!

In Queensland employment fell by 7,400 and the unemployment rate lifted to 6.1% (March was revised up to 6.0%). As was the case nationally, full-time positions improved for the month up 8,300. Nevertheless the decline in Participation in QLD (down just 0.1 ppt to 66.4) was not as dramatic as nationally hence the increase in the unemployment rate. Annual employment growth in QLD jumps to +7.8% in April (from +2.4% in March) as the base effect takes hold. Of the 189,600 additional employed in QLD since April last year 98,000 (or 52%) came in full-time positions; compare this to just 39% at the national level.

Many have been hoping that the April Labour Force data might tell us something about the effect of the end of JobKeeper at the end of March. Unfortunately the reality is that any such effect is hard to discern given the concurrent effects of Easter and school holidays and the way that COVID has impacted seasonal factors more generally. As the ABS note….

The end of the JobKeeper wage subsidy did not have a discernible impact on employment between March and April.

“We have not seen large changes in the indicators that would suggest a clear JobKeeper impact, such as an increase in people working reduced or zero hours for economic reasons or because they were leaving their job. We also haven’t seen large net flows out of employment across many population groups,” Mr Jarvis said.

“Some of the 31,000 fall in employment may relate to the end of JobKeeper, but it could also reflect usual month-to-month variation in the labour market and some larger than usual seasonal changes similar to those we saw earlier in the year”

Seasonal factors explained the larger fall in hours (down 0.7 per cent), which was again attributed to higher than usual numbers of people taking leave around the public and school holidays.   

“Like we saw in January, the number of people taking leave over the Easter public and school holidays was also higher than in the past,” Mr Jarvis said.  

As the ABS note, hours worked fell in April and one of our favourite measures, hours worked per capita of working age population, demonstrates that slight decline: Down 0.75% nationally and 0.58% in Queensland. However, both are well up from their COVID lows and Queensland in particular is still close to 3-year highs.

At times such as this, with seasonal factors causing some of the uncertainty seen in the data it would be wonderful if the ABS Trend series were still available to help us. While the ABS (rightly) are still not ready to reintroduce this series we have done some work which illustrates why they ceased the Trend, why we are still some way from seeing it reintroduced, and also a vague idea of what it might actually look like now (if it were being released). Our (rather optimistic) post from Jan this year gives a little more detail.

Next Thursday we will get the regional data which will allow us to update the Conus/CBC Staff Selection Trend series.

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