Australian May Unemployment

With all the election hype the unemployment figures for May were released last week and little attention was paid to them. They show an interesting trend.

The full figures are given below in the link, but as can be seen employment is up (very slightly) and unemployment down, although the unemployment rate stayed at 5.7%.

What you should notice is that employment is rising at a slower rate. The figures are now clear, each month is seeing a smaller rise in employment. We can see confirmation of this in the number of job vacancies, which fell from 172,600 to 169,400. It might not seem much, but that is the worst fall since 2013. It means that fewer new job opportunities are arising.

So far this is not causing a huge crisis. This is because the participation rate is falling and decreased by 0.1 points to 64.8% last month. A lower participation rate has resulted in fewer job seekers per vacancy than there would have been. The number of unemployed people today per vacancy stands at 4.2, but if the participation rate had stayed at its November level that would now be 4.5 people per vacancy.

 

The moral of this story? The headline figures can look okay, but looking deeper allows us to see that the outlook is not as good as it was and there may yet be an unemployment problem for Australia around the corner.

The full ABS figures for May are here

The figures on Australian unemployment are of direct relevance to VCE students. However the relationship highlighted in this article between the participation rate, vacancy rate and unemployment rate is relevant for IB and VCE students. It shows how there are always more questions to ask about data.