The report showed that a net of 9,800 workers lost jobs in September,
which is far from the 15,200 job gains that market players were
expecting. And what’s worse than weak reports? Downward adjustments to
last month’s already weak numbers, of course! August’s unemployment rate
was revised higher from 5.6% to 5.7% while the net job losses was
revised from 3,900 to 8,600. Yikes!
The only bright spot was the decrease of the unemployment rate from 5.7% to 5.6% and even that was taken with a bucket of salt. See, the labor participation rate also fell from 64.7% to 64.5%, the lowest in almost two years. With a net job loss for the month, this means that the decrease in unemployment rate was mostly due to workers giving up on their job prospects instead of finding them.
So far the 162,800 part-time jobs added this year is the biggest gain on record going back to 1978. Meanwhile, the 112,100 full-time jobs cut in the same period marks the worst since 1991 when the economy was in recession.
To add insult to injury, the underemployment rate, or the portion of those who are employed but want to work longer hours, is now at a record high of 8.7%, a huge gap from last year’s 7.8%.
So while the unemployment rate is at its lowest in three years, we know that it’s partly due to potential workers giving up on looking for jobs and partly because workers are now accepting part-time jobs and are working for less hours than they’d like.
The prospect is worrying investors who believe that the understatement of Australia’s labor market problems will lead to limited household income growth. Already ratings agency Moody’s warned that underemployment was a major cause of rising mortgage repayment arrears, which are at a three-year high nationally and record levels in Western Australia, Tasmania and the Northern Territory.
The only bright spot was the decrease of the unemployment rate from 5.7% to 5.6% and even that was taken with a bucket of salt. See, the labor participation rate also fell from 64.7% to 64.5%, the lowest in almost two years. With a net job loss for the month, this means that the decrease in unemployment rate was mostly due to workers giving up on their job prospects instead of finding them.
Part-time means hard time for Australians
If we look closely at the 9,800 job losses, we’ll see that it’s due to 53,000 workers losing their full-time jobs. This marks the biggest monthly drop since April 2011! What’s more, this is only partially offset by the 43,200 gain in part-time work.So far the 162,800 part-time jobs added this year is the biggest gain on record going back to 1978. Meanwhile, the 112,100 full-time jobs cut in the same period marks the worst since 1991 when the economy was in recession.
To add insult to injury, the underemployment rate, or the portion of those who are employed but want to work longer hours, is now at a record high of 8.7%, a huge gap from last year’s 7.8%.
So while the unemployment rate is at its lowest in three years, we know that it’s partly due to potential workers giving up on looking for jobs and partly because workers are now accepting part-time jobs and are working for less hours than they’d like.
The prospect is worrying investors who believe that the understatement of Australia’s labor market problems will lead to limited household income growth. Already ratings agency Moody’s warned that underemployment was a major cause of rising mortgage repayment arrears, which are at a three-year high nationally and record levels in Western Australia, Tasmania and the Northern Territory.
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