The number of full-time employees in Australia dropped by 106,600 people in December 2023, balanced by an increase in part-time employment by 41,400.
These figures were released by the Australian Bureau of Statistics (ABS), which showed a small fall in the number of unemployed people by 1,000 in December.
This comes as the retail industry reported a dip in job vacancies in November 2023, with around half of the 1.35 million people in the industry being full-time employed.
ABS head of labour statistics David Taylor said the fall in overall employment of 65,000 people in December followed a “larger-than-usual” combined increase of 117,000 in October and November.
With the fall in both employment and unemployment in December, the seasonally adjusted participation rate fell 0.4 percentage points to 66.8%, reverting to levels last seen in September 2023.
The employment-to-population ratio also fell, down 0.4 percentage points to 64.2%, which was the lowest employment-to-population ratio since May 2022, but still 1.9 percentage points higher than March 2020.
"The strength in employment in October and November and the fall in December, reflected changes in the timing of employment growth in the last few months of 2023, compared with earlier years,” Taylor said.
"While the December employment fall was large, the number of employed people was still 52,000 higher than September. Looking over the past twelve months, seasonally adjusted employment increased by an average of 32,000 people per month, showing reasonably strong underlying growth during 2023.
Meanwhile, both monthly hours worked and employment fell 0.5% in December 2023. The annual growth rate in hours worked continued to slow, hitting 1.2%, and is well below the annual employment growth of 2.8%.
"The slowdown in hours worked since the middle of 2023, after very strong growth during 2022-23, saw the total monthly hours worked in December back around where it was in February," Taylor said.
"Despite the 0.5% decrease in employment in December, both unemployment rate and underemployment rate remained steady, indicating that the labour market continues to be relatively tight,” Taylor said.
In trend terms, the unemployment rate remained at 3.8%, with employment growing by around 19,000 people and hours worked falling 0.2% in December.
The ABS defines a trend data as a seasonally adjusted series that has been further adjusted to remove irregular effects and 'smooth' out the series to show the overall 'trend' of the data over time.
The employment-to-population ratio fell 0.1 percentage point to 64.4% in December, while the participation rate remained at 67.0%, in trend terms
The underemployment rate remained at 6.5% and the underutilisation rate remained at 10.3%, in line with November's updated figures.
"In trend terms, many of the key indicators still point to a tight labour market,” Taylor said. “However, the increasing unemployment rate since November 2022, along with the rising underemployment rate and slowdown in the growth of employment and hours worked, suggest that the labour market is starting to slow.”
Various sources suggest this may push the Reserve Bank of Australia to hold interest rates ahead, with declines expected by mid-to-late 2024.