Data points to hefty employment fall

Payroll jobs dropped further by mid-September as coronavirus lockdowns continued to bite, and now stand below their pre-pandemic level.

Economists expect next week's key labour force data for September could show a hefty 200,000 fall in employment after the 146,300 tumble in August.

The Australian Bureau of Statistics said payroll jobs fell by 0.7 per cent in the fortnight to September 11, following a larger 1.5 per cent drop in the previous two weeks.

"The series of falls in payroll jobs through July, August and into September saw payroll jobs fall back below their pre-pandemic level," ABS head of labour statistics Bjorn Jarvis said.

"Apart from the seasonal fall after Christmas, payroll jobs in mid-September 2021 were the lowest they had been in Australia since the end of August 2020, during the second wave lockdown in Victoria."

Payroll jobs are now 0.5 per cent below where they were when the pandemic first hit Australia in the early months of 2020.

Locked down ACT and Victoria saw the largest falls in payroll jobs during the latest reported fortnight, declining 2.3 per cent and 1.8 per cent respectively.

However, given Victoria's large share of jobs in Australia, payroll job losses there accounted for almost three-quarters of all jobs lost during the fortnight.

Payroll job losses slowed 0.3 per cent in NSW, compared with a 1.6 per cent fall in the previous fortnight.

"The levelling out of payroll data in NSW can only be described as a good sign that the opening up of Greater Sydney in the coming weeks will put some bounce back into the labour market," EY senior economist Johnathan McMenamin said.

Perversely, the unemployment rate fell to a near-13-year low of 4.5 per cent in August, but this was the result of people giving up looking for work.

Commonwealth Bank economists expect next Thursday's labour force report for September will show the unemployment rate rising to five per cent as employment falls by 200,000.

The ANZ job advertisement series for September, also released this week, saw a third consecutive monthly fall and points to an unemployment rate above five per cent in coming months.

Meanwhile, Australia's services sector remained in decline in September, but a leading business group hopes easing coronavirus restrictions will see the industry begin to recover in the coming months.

While the Australian Industry Group performance of services index edged up by 0.1 points to 45.7 in September, it remained below the 50-point mark that separates contraction in the sector from expansion.

"Restrictions associated with the Delta outbreaks in southeastern Australia were the major contributor to the continued contraction of the Australian services sector in September," Ai Group chief executive Innes Willox said.

"While predictions are highly conditional, we are expecting a mild upturn in October followed by further gains as restrictions are eased in line with higher levels of vaccination."

Austrlaian Associated PressBack to Breaking News

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