According to the Australian Bureau of Statistics (ABS), the unemployment rate in Australia dropped by 0.1 percentage points to 3.6% in May. The decrease was attributed to an increase of around 76,000 employed individuals and a decrease of 17,000 unemployed individuals. The strong growth in employment followed a minor decrease in April during the Easter period. The average employment increase over the past two months has been around 36,000 people per month, consistent with the average over the past year.
The number of employed individuals in Australia reached a milestone, surpassing 14 million for the first time. Prior to the pandemic, the number of employed individuals was around 13 million, indicating substantial growth. The employment-to-population ratio also rose to a record high of 64.5%, reflecting a higher proportion of the population being employed.
The participation rate, which measures the proportion of people aged 15 years and older in the labor force, increased by 0.1 percentage points to 66.9%. The participation rate for women reached a record high of 62.7%, while the rate for men remained at 71.2%.
Although there was a decrease of 1.8% in monthly hours worked, this was expected due to reduced working hours during the Easter period. However, the overall strength of hours worked since late 2022 indicates that labor demand in a tight market is being met, to some extent, by people working more hours.
The underemployment rate rose by 0.3 percentage points to 6.4%, while the underutilization rate, which combines the unemployment and underemployment rates, increased by 0.2 percentage points to 10.0%. Despite the slight increase, both rates remain relatively low compared to pre-pandemic levels.
The underlying trend data reveals a higher monthly increase in trend employment compared to the average for the 20 years before the pandemic, indicating strong employment and hours worked growth.
Overall, the labor market in Australia remains tight, with indicators such as strong growth in hours worked, elevated employment-to-population ratio, and low unemployment and underemployment rates, all pointing to a positive trend.