The Australian economy has taken another big step in its recovery from COVID-19, with the official unemployment rate falling from 7.0 to 6.8 per cent in November.
Economists said the figures were better than expected. And unlike in previous months, full-time employment led the charge.
“Over the past two months, the recovery has transitioned from part-time to full-time job creation and that is a welcome development as the year draws to a close,” said Callam Pickering, APAC economist at jobs site Indeed.
“Full-time job creation is a key measure of Australia’s economic recovery.”
Data released by the Australian Bureau of Statistics on Thursday shows the number of Australians with full-time jobs in November increased by 84,200 to 8.73 million people, while part-time employment increased by 5800 to 4.14 million people.
As a result, full-time employment over the past two months has now risen by a record 2.1 per cent, meaning 183,000 people have returned to full-time work.
This provides some cause for optimism, but full-time employment is still 1.8 per cent lower than its peak.
The ABS data shows Australians had 110,900 fewer full-time jobs in November 2020 than in November 2019, but 27,800 more part-time jobs.
“That reflects both the easing of restrictions and possibly a reclassification of some jobs from full-time to part-time due to a lack of available hours,” Mr Pickering said.
Elsewhere, the data shows Victoria’s reopening was the main driver of national jobs growth.
The eastern state created more than four out of every five new jobs in November – with employment in the state rising 2.2 per cent over the month as restrictions eased and workplaces reopened.
But in other states the recovery was mixed.
The number of employed Australians rose in New South Wales (+0.6 per cent), Western Australia (+0.8 per cent), and Tasmania (+0.8 per cent), but fell in Queensland (-0.8 per cent), South Australia (-0.1 per cent) and the Northern Territory (-1.0 per cent).
“From a statistical standpoint, the Victorian labour market now appears almost indistinguishable from any other state. The labour market improved considerably the moment restrictions were lifted, ” Mr Pickering said.
Overall, the creation of 90,000 new jobs in November was more than double what most economists had expected.
Treasury now expects the official unemployment rate to peak at 7.25 per cent in the March quarter of 2021 – down from a peak of 8 per cent forecast in the 2020-21 federal budget.
BIS Oxford Economics chief economist Sarah Hunter said the ABS data confirmed the recovery was “well-entrenched” – though she noted the pace of future jobs growth would now slow “as the boost from Victoria’s re-opening fades”.
“Not unexpectedly, Victoria is responsible for the majority (80 per cent) of the increase in employment in November, with the easing of restrictions in Melbourne allowing many businesses to re-open and take on staff,” Dr Hunter said.
“But New South Wales, Western Australia and Tasmania surprised on the upside, with significant gains [too].”