Jump in part-time work drives unemployment rate dip

AUSTRALIA’S unemployment rate has dipped, benefiting from a jump in part-time jobs that offset the loss of more than 20,000 full-time positions during the past month.

Official figures reveal the jobless rate was 5.6 per cent in July, an improvement from an upwardly revised rate of 5.7 per cent in June.

While it was a rise in parttime employment that delivered the lower unemployment rate, economists said it was a positive headline result.

However, they warned further improvements may prove difficult to achieve and detail in the statistics painted an uncertain outlook.

According to the Australian Bureau of Statistics, Australia’s workforce grew by about 28,000 during July. While 20,300 full-time jobs were lost, there was an increase of 48,200 part-time jobs.

“Some of the detail was a bit softer than the headline: fulltime jobs fell, hours worked were down and the job gains were narrowly based,” ANZ senior economist Felicity Emmett said. “But we won’t overplay these details. The labour market is clearly improving and additional job gains look likely in the near term.”

The jobs recovery, however, was very patchy, with Queensland accounting for the vast majority, with 27,000 new positions. New South Wales had a net increase of 500.

Victoria and Tasmania each lost 2200 jobs, while Western Australia was down 1300, Ms Emmett said.

JP Morgan economist Ben Jarman underlying issues, including ongoing underemployment, also remained.

“The ‘grossing up’ effect from a stronger employment and population base is also evident, in that while hours worked are up 1.9 per cent on the year, they are flat on a perworker basis,” Mr Jarman said.

The headline unemployment rate, as well, was a statistical blimp, Mr Jarman said.

“The unemployment rate edged down only on the third decimal place, with rounding making the difference between this month’s 5.6 per cent and last month’s 5.7 per cent,” he said.

AMP Capital economist Shane Oliver remains concerned about the imbalance between part-time and fulltime jobs.