According to the latest Labour Force data released by the Australian Bureau of Statistics, the unemployment rate fell to 4.5% in August 2021 in seasonally adjusted terms. This is the lowest level since November 2008, and is reflective of the tough lockdown restrictions imposed in New South Wales and Victoria. With a significant portion of the population in lockdown, many unemployed people were discouraged by difficulties in actively looking for work. In turn, these individuals dropped out of the labour force altogether, and were no longer being reflected in the unemployment rate.
Employment decreased by 146,000 people in August, bringing the total number of employees in the labour force to approximately 13.02 million people in seasonally adjusted terms. The youth unemployment rate, which measures the number of people aged 15-24 that are actively looking for work, reached 10.7% during the month, an increase by 0.5 percentage points from the previous month. Younger people generally work part-time in industries that are highly vulnerable to COVID-19 lockdown restrictions, such as retail trade and hospitality, which exposes them to a high risk of job cuts. The part-time share of employment was 31.2% in August. This was 0.5 percentage points lower than the initial lockdown period in March 2020.
The national participation rate, which accounts for the number of Australians with a job or seeking one, declined to 65.2% in August, and this included a fall by 2.5 percentage points in New South Wales alone. The overall health of the labour market is better captured by changes in hours worked. Skill shortages have been incentivising businesses to retain employees while cutting back shifts in line with fluctuating trading restrictions. The number of hours worked fell by 3.7% in August, following two consecutive months of declines over June and July. Overall, the ongoing vaccine rollout and the path out of lockdowns will continue to shape the recovery in the Australian labour market.
