Jobless rate up, worse to come

Australia’s unemployment rate has hit its highest level in two years and economists say it could soon get worse.

Figures released by the Australian Bureau of Statistics on Thursday show the seasonally adjusted jobless rate rose to 4.1 per cent in January, from 3.9 per cent in the previous month.

There are now 600,600 people unemployed across the country, compared to the 578,300 Aussies who were out of work in December.

It’s the first time the unemployment rate has been above 4 per cent since January 2022.

ABS head of labour statistics Bjorn Jarvis said the increase in the unemployment rate in January 2024 coincided with a higher-than-usual number of people who were not employed but who said they would be starting or returning to work in the future, as was seen in January 2022 and 2023.

“While there were more unemployed people in January, there were also more unemployed people who were expecting to start a job in the next four weeks,” he said.

“This may be an indication of a changing seasonal dynamic within the labour market, around when people start working after the summer holiday period.

“In January 2022, 2023 and 2024, around 5 per cent of people who were not employed were attached to a job, compared with around 4 per cent in the January surveys prior to the COVID-19 pandemic.”

But Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said the unemployment rate would probably increase as the year progresses.

“We expect the unemployment rate will trend higher over 2024, reaching a peak of 4.5 per cent,” he said.

“But with the unemployment rate reaching 4.1 per cent in January, this cycle appears to be running ahead of schedule.

The slackening of the labour market is well and truly under way.

“The swift weakening in labour market conditions raises some doubts as to whether we will see an orderly easing in conditions in 2024.”