Nation of part-timers

Jobless rate falls as full-time work shrinks

FULL-TIME work is rapidly disappearing in Australia and paving the way for further interest rate cuts, economists warn, even as latest data shows a drop in the nation’s unemployment rate.

Australia’s unemployment rate fell to 5.6 per cent last month, from 5.7 per cent in August, it’s lowest in three years.

But the fall has been driven by a drop in people looking for work, while the trend to parttime employment continued.

The number of people in full-time jobs fell by 53,000, while only 43,000 gained parttime work, according to Australian Bureau of Statistics figures released yesterday.

The number of people with jobs fell by 9800 in the month, undershooting the market forecast of a 15,000 rise.

Full-time jobs lost since the beginning of the year number about 112,000. Capital Economics chief economist Paul Dales said the national fall was entirely driven by more unemployed people giving up looking for work, with the participation rate falling from 64.7 per cent to 64.5 per cent.

Mr Dales said the slowing employment market was interesting given Reserve Bank governor Philip Lowe’s comment on Tuesday that the case for moving more quickly to cut rates “would be strengthened in a world where the labour market was deteriorating”.

“The RBA may not be too worried by the further decline in employment in September since the data are subject to a couple of distortions and since the unemployment rate fell to 5.6 per cent from 5.7 per cent,” Mr Dale said in a note. “But the labour market is edging closer to the deterioration that Reserve Bank governor Philip Lowe hinted earlier this week could prompt more rate cuts.”

JP Morgan economist Tom Kennedy said the official unemployment rate of 5.6 per cent was understating the level of slack in the labour market.

In Queensland, the unemployment rate fell from 6.2 per cent to 6 per cent and Treasurer Curtis Pitt said the data was proof the state Government’s plan was working.

“We know there is more work to do because not all sectors and regions are transitioning to a post-mining boom economy as well as others,” he said.

He said more than 40,000 jobs had been created since the Palaszczuk Government was elected early last year.