Australian Unemployment Rate Eases to 6.2%

Government fears that its push to make dole recipients apply for more jobs would cause a politically damaging increase in measured unemployment have eased, with the latest figures showing a drop in the unemployment rate back to 6.2 per cent. The economy generated more than 17,400 new jobs over the month to August — around three times what economists had been expecting — which was enough to pull down the unemployment rate from its 13-year high of 6.3 per cent in July.

The Australian dollar rose to almost US70 cents on the news, as investors discounted the chance the Reserve Bank would feel compelled to cut interest rates again. The Australian Bureau of Statistics also said the workforce participation rate — or the proportion of working-age people employed or actively seeking work — fell to 65.0 per cent in August from 65.1 per cent in July. Around two-thirds of the jobs growth was in male fulltime work and the balance female part-time work. Economists had forecast the unemployment rate would fall to 6.2 per cent in August.

However the government had been worried that a change in social security rules, rolled out over July and August, that now requires Newstart recipients who are studying to look for up to 20 jobs a month (they had been exempt), would push up the measured level of unemployment. This latest jobs report will help sustain the Abbott government’s claim to be overseeing a recovery in the Australian jobs market.