The employment numbers released on Thursday made for good headlines, with almost 30,000 people finding jobs in January and the unemployment rate falling to 6.4 per cent.
But buried in the detail were signs of a recovery running out of puff, with the number of employed Australians outside Victoria actually going backwards.
Economists have consequently warned that our economic momentum is starting to fade and have singled out young Australians as particularly at risk.
Employment fell 7.7 per cent in January for people aged 20 to 24, in what Indeed APAC economist Callam Pickering called an inevitable consequence of a pandemic-ravaged economy.
“[We’re] beginning to see the longer-lasting impact of the COVID-19 pandemic … the economy isn’t quite as big as it was,” he told The New Daily.
Excluding Victoria, where the state economy has a different recovery timeline due to its extended second lockdown, the ABS data showed there were 21,500 fewer jobs in Australia in January than in December.
Employment over the past two months fell by 0.45 per cent in NSW, 1.49 per cent in South Australia, and 0.96 per cent in Western Australia.
Momentum also stalled up north in Queensland, where employment improved just 0.09 per cent in January after a 1.4 per cent gain last month.
But in Victoria, employment increased 1.7 per cent over the December-January holiday period, which meant Victorians gained 58,000 new jobs.
BIS Oxford chief economist Sarah Hunter said the slowing progress across the country suggested there were no more “easy wins” in the recovery, after a strong initial bounce back.
“Businesses have been able to reopen and things have returned at least close to normal, [but] there are pockets of the economy that are still really struggling,” she told The New Daily.
Dr Hunter said we had moved to a new phase of the recovery, where weakness in the tourism, events and arts sectors would show up more prominently in jobs data, at least until international borders reopened.
“The challenge for this year is how many people working in those sectors can be moved into other [areas]?” she said.
It’s widely accepted that many workers will struggle to find new jobs.
The tourism sector is already lobbying the federal government for an industry-specific JobKeeper replacement, warning 300,000 people could become unemployed when the scheme ends in March.
Modelling published by the Tourism Forum on Thursday predicted three times more job losses than the 102,900 workers employed on zero hours for economic reasons in January, which was up 31 per cent on 2020.
EY chief economist Jo Masters told The New Daily young workers were likely to be overrepresented among those on zero hours heading into March.
“Typically after a recession youth unemployment recovers more slowly. That’s been exacerbated this time around because the hit from COVID-19 has been predominantly on industries that tend to hire young workers,” she said.
Employment among those aged 25 to 34 remains 2.2 per cent lower than before the pandemic, a figure that rises to 5.0 per cent for those aged 15 to 24.
Employed millennials appear to be acutely aware of the worrying conditions, according to a survey published by LinkedIn on Thursday.
The research found four in five were putting off career advancement for job security, while only 30 per cent were confident about increasing their income.
Independent economist Saul Eslake believes there’s more reason to be optimistic than downbeat, though, with unemployment and underemployment falling in January as more full-time jobs became available in the new year.
Mr Eslake said this suggested the withdrawal of JobKeeper in March would have less of an impact on jobs than many people feared – though he said it could lead to some volatility in the April data.
“I draw some comfort from the fact that months after the first and second stepdown in the level of JobKeeper, we haven’t seen any material impact on employment,” Mr Eslake told The New Daily.
He said it was too soon to conclude the economic recovery was running out of puff, though he was surprised by the weakness in New South Wales over January.
“NSW did have a lockdown, though,” he said.
“That would have spilled over into January.”