Almost 2300 jobs were created every day in March as the economy once again exceeded expectations.
More than 70,000 Australians found new jobs over the month – equating to 2280 every day – as the unemployment rate fell from 5.8 per cent to 5.6 per cent.
The underemployment rate also fell to its lowest level since June 2014 – indicating that employers have greater confidence in the economy and are giving staff more hours as a result.
Treasurer Josh Frydenberg said the ABS jobs figures were “another proof point of Australia’s economic recovery gaining momentum”.
Economists at ANZ and Commonwealth Bank described them as “very strong” and “incredibly strong” respectively, coming just one day after a closely followed index of consumer sentiment hit an 11-year high.
The one obvious downside was the loss of 21,000 full-time jobs, which were offset by 91,500 new part-time positions.
But Indeed APAC economist Callam Pickering said the longer-term trend in full-time jobs growth was a positive one.
“We’ve seen such strong full-time job increases in the previous five months, where 360,000 full-time jobs were created, that I’m just not that surprised that we saw a relatively small dip in March,” Mr Pickering told The New Daily.
“I wouldn’t read too much into it,” he said.
The data shows that more Australians had jobs and more hours were worked across the economy in March than in March 2020, with female participation – or the proportion of working-age women either with a job or looking for one – increasing to a historic high of 61.8 per cent and overall participation hitting a historic high of 66.3 per cent.
What remains unclear, though, is how the removal of JobKeeper has affected the labour market.
Treasury officials estimate up to 150,000 people could have lost their jobs when the wage subsidy ended on March 28, but the latest figures do not capture this as they refer to the first half of the month only.
Equity Economics lead economist Dr Angela Jackson believes JobKeeper’s removal will lead to an uptick in unemployment in April – the data for which will be released a week after May 11’s federal budget.
But whoever needs to find a new job will at least be starting their search at a time of record-high job vacancies.
SEEK revealed on Thursday the number of job ads posted on its site in March was an all-time high – though ABS figures show there are still almost three unemployed Australians (778,100) for every one vacancy (288,700).
“Overall, it is good news. The economy has recovered well,” Dr Jackson said.
“The question is, ‘How does it go in the face of border closures in particular … and with the removal of fiscal stimulus over the next three to six months?’”
Border closures will bite
Dr Jackson said the pace of the economic recovery would slow down if international borders remained closed for the foreseeable future.
She told The New Daily some sectors relied heavily on migrant labour and would therefore struggle with skills shortages, which would weigh on the nation’s productivity.
“The ongoing closure of borders for another 12 months has to present a significant challenge to the economy over that period – the tourism sector won’t be able to recover, international education won’t be able to recover, and they are important employers and growth industries,” Dr Jackson said.
“On top of that, we won’t have those skilled migrants coming in again for another 12 months, plus you’ll start seeing more people leaving … as other economies roll out their vaccines.”
Notwithstanding the challenges, the strength of the labour market recovery, combined with the near complete removal of domestic restrictions, has put a smile back on the face of the average consumer.
The Westpac-Melbourne Institute Index of Consumer Sentiment hit an 11-year high in April in what Westpac chief economist Bill Evans described as “an extraordinary result”.
He said the survey disproved initial fears that the unwinding of JobKeeper would undermine confidence.
More ambition needed
But the confidence boost is unlikely to materially improve the nation’s record-low wages growth.
Wages grew by just 1.4 per cent over the 12 months to December 31, and Reserve Bank governor Philip Lowe believes we are unlikely to get a decent pay rise until unemployment falls to 4 per cent, something that hasn’t happened since 2008.
“Returning to where we were before the crisis – we’ve got there before we expected. But the economy wasn’t travelling that well before the crisis,” Mr Pickering said.
“Most economists were talking about rate cuts even before the pandemic hit, so merely getting back to where we were isn’t really where we want to be.
“So I think the federal government does need to aim higher.”