Finance Work Unemployment rate drops to 6.4 per cent

Unemployment rate drops to 6.4 per cent

may unemployment 2020
A further 29,100 people joined the workforce in January. Photo: Getty
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The unemployment rate unexpectedly dropped to 6.4 per cent in January as a further 29,100 people joined the workforce in the month.

Economists had expected the jobless rate to have eased from 6.6 per cent 6.5 per cent.

“January 2021 was the fourth consecutive monthly rise in employment, as employment in Victoria continued to recover,” Australian Bureau of Statistics’ Bjorn Jarvis said, releasing the latest labour force report on Thursday.

“Nationally, employment was only 59,000 people lower than March 2020, having fallen by 872,000 people early in the pandemic.”

The number of people in full-time employment increased by 59,000 in January, while part-time workers declined by 29,800, ABS figures show.

The participation rate of those in work or seeking employment eased from a record high of 66.2 per cent in December to 66.1 per cent.

While still well above the 5.1 per cent rate seen before the coronavirus hit Australia’s shores, unemployment is now comfortably below the 7.5 per cent level seen in July last year.

“In contrast to expectations three months earlier, the peak in the unemployment rate had probably already occurred,” the minutes from the Reserve Bank’s February board meeting said this week.

The central bank now expects the unemployment rate to decline to around six per cent by the end of 2021, before reaching around 5.25 per cent by mid-2023.