Key Points
The Australian labour market entered choppy territory in July. The underlying momentum of the labour market across the Federation swapped between States and Territories, and hours worked continued to be highly volatile.
National unemployment fell to the lowest level since the labour force survey began in 1978 (SA and QLD the highest, VIC the lowest), but the employment to population ratio pulled back slightly across the Federation except in WA and the NT. This means workers left the labour market faster than they became unemployed.
Underemployment declined everywhere except Queensland, which jumped to the second highest underemployment rate in the Federation behind South Australia.
Labour Force Survey: what it is, why it matters
The Labour Force survey is one of our most important indicators for the state of the economy. It comes closest to giving us an idea of the lives of everyday people by giving us a snapshot of Australia at work. The key numbers in this survey are:
Employment: the number of persons who worked a certain number of hours.
Unemployment: the number of persons searching for, but unable to become employed.
Underemployment: the number of employed persons who’d like to work more hours.
Hours worked: the total hours worked by all workers.
From this we get a couple of derived numbers: the unemployment rate and the underemployment rate. The key limitation of the first is the slippery definition of unemployment; it’s easy for the unemployment rate to drop because unemployed people get discouraged and leave the labour force. So, we use a few different numbers to get a good picture of the underlying strength of the labour market across the Federation.
Though we still must acknowledge that this gives us a very quantitative view of the market and we don’t have a great sense of what these jobs are like, these numbers in concert give us a rich sense of Australia at work across the Federation.
As always, we use the seasonally adjusted numbers to get a little bit of the volatility stripped out. First, we start with the Big Numbers. Then we drill down into the three core counts to get a sense of the momentum of the labour market and the economy is going across Australia: first employment and unemployment, and then hours worked.
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