Australia's unemployment update

Australia’s unemployment rate has fallen to 5.8% from 6.8%, but what does that actually mean? Is that good? I mean, it’s going…down, so that must be good, right? Let’s take a deep dive.

Unemployment
The unemployment rate refers to the percentage of the labour force who are out of work. Of course, the pandemic has significantly impacted these numbers, as hundreds of thousands of Australians became unemployed during early stage lockdowns and beyond. The recent fall in unemployment (especially this month) has surprised some economists, and suggests that the labour market is improving faster than first anticipated. The number of unemployed people in Australia is roughly 1,900 more than this time last year.

Youth unemployment
Then there’s the youth unemployment statistic in Australia. The youth unemployment rate decreased 1.1 points to 12.9% in February 2021. The Prime Minister addressed this saying, “there is still a lot more to do, particularly for young people and even though the youth unemployment rate has pleasingly fallen, there is still a distance to travel”.

Underemployment
So yes, the unemployment rate has dropped, but there are more statistics beyond the surface to consider, like the underemployment rate that actually rose from 8.1 to 8.5% over February 2021. This indicator refers to those who are employed, but are looking for more working hours. Economists sometimes add the unemployment rate and underemployment rate together (calling it the underutilisation rate) to paint a more accurate picture of the labour market. This figure currently sits at 14.4%.

Despite the overall unemployment rate falling, it is believed there are still structural issues in the labour market that need to be addressed. The next challenge Australia faces is the expiry of the Jobkeeper program, which is set to finish on March 28 (next Sunday).