Finance Finance News Shrinking job numbers put workforce woes front and centre
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Shrinking job numbers put workforce woes front and centre

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COVID lockdowns have shrunk the size of the workforce. Photo: TND
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The focus will remain on the plight of Australia’s labour market in the coming week after the number of people employed tumbled by a huge 146,300 in August.

The sharp decline revealed in last week’s monthly labour force report came as Australia suffers the impact of having around half the population in lockdown to battle the Delta variant of the coronavirus.

That report, which was surveyed between August 1 and August 14, also showed the unemployment rate unexpectedly falling to a fresh 13-year low of 4.5 per cent.

But this was a reflection of a drop in people looking for work due to lockdowns, rather than signalling a further strengthening in the labour market.

“Perversely, reopening (from lockdowns) may see unemployment rise a bit as participation rebounds,” AMP capital chief economist Shane Oliver said.

The Australian Bureau of Statistics will release its weekly payroll jobs report on Thursday, which will cover the period to August 28, and provides a guide to the full labour force report.

Job ads shrink

The National Skills Commission will also release it s final report on job vacancies posted on the internet on Wednesday, a pointer to future hiring intentions among businesses.

Its preliminary report showed job ads fell 5.6 per cent in August, a third consecutive monthly decline after striking a 12-year high in May.

The Reserve Bank of Australia will release the minutes of its September 7 board meeting on Tuesday, although it is unlikely to provide any fresh revelations given a wide ranging speech by governor Philip Lowe last week.

In that address, Dr Lowe warned the unemployment rate could hit the “high fives” for a short period of time, with the economy expected to contract by at least two per cent in the September quarter.

But he also conceded the jobs figures will be difficult to interpret over coming months. Hours worked, rather than headcount, may be a better guide to the health of the labour market.

In the case of August, hours worked tumbled by 3.7 per cent or 66 million hours.

Meanwhile, Australian shares look set to start to the week lower following a broad sell-off on Wall Street.

Concerns persist that the US Federal Reserve may start winding back on its stimulus, while there are also fears of a potential hike in corporate taxes with leading Democrats seeking to raise the top tax rate to 26.5 per cent from the current 21 per cent.

Australian share futures fell 68 points to 7302 in response.

The Australian benchmark S&P/ASX200 index closed 56.5 points, or 0.76 per cent, lower at 7403.7 on Friday reflecting a weaker shares in iron ore miners plunged as the red metal continued to recoil from record highs seen earlier in the year.

-AAP