The unemployment rate fell by 0.1 percentage point to 3.6% in September, according to new data from the Australian Bureau of Statistics (ABS).
ABS head of labour statistics Kate Lamb said 7,000 people gained employment in September, while the number of unemployed people fell by around 20,000, leading to the slight dip.
“It is important to remember that a fall in unemployment does not always mean much higher employment,” Lamb said.
“The fall in the unemployment rate in September mainly reflected a higher proportion of people moving from being unemployed to not in the labour force.
“The participation rate fell 0.2 percentage points to 66.7% from last month’s record high of 67.0% but remained well above levels before the COVID-19 pandemic.”
The small increase in employment in September followed a large increase in August, when it had lifted by 65,000 people from July.
“Looking over the past two months, average monthly employment growth was 35,000 people, around the average growth we’ve seen in the past year,” Lamb said.
In trend terms, the unemployment rate remained at the same 3.6% mark.
Employment grew by around 23,000 people over the last year (0.2%) and hours worked fell 0.1% in September. In the same timeline, employment has increased by 2.8% and hours worked by 3.3%.
“In trend terms, growth in hours worked has been steadily slowing since June 2023 and fell slightly in September,” Lamb said.
“However, in trend annual terms, the hours worked growth remains noticeably higher than the growth in employment.
"The monthly employment increase of 0.16% in September was in line with the average growth rate we saw in the 20 years before the pandemic.”
The employment-to-population ratio fell 0.1 percentage point to 64.4%, back to its average level for the past 12 months.
Monthly hours worked fell 0.4% in September 2023, following a fall of 0.5% in August, while employment rose by less than 0.1%.
Lamb said annual growth in hours worked to September 2023 was no stronger than annual growth in employment - with both growing 2.9%. This is the first time they have grown since December 2022, when Australia saw more people than usual working reduced hours due to illness.
“The recent softening in hours worked, relative to employment growth, may suggest an easing in labour market strength, though it also follows particularly strong growth over the past year,” Lamb said. “As seen in the job vacancies data, demand for workers has fallen slightly, but the labour market continues to be relatively tight and resilient.”
Meanwhile, the underemployment rate fell 0.2 percentage points to 6.4% in September. While this is 0.4 percentage points higher than September 2022, the ABS noted this is still around 2.4 percentage points lower than before the pandemic.
The underutilisation rate - which combines the unemployment and underemployment rates - fell 0.3 percentage points to 9.9%. This was 0.3 percentage points higher than last September, but 4.0 percentage points lower than March 2020.