Australia’s unemployment rate dropped by 0.1% to 3.6% last month, Australian Bureau of Statistics (ABS) data revealed.
Due to the fall, Australia’s national workforce has passed 14 million people for the first time.
ABS head of labour statistics Bjorn Jarvis said employment increased by 76,000 people and unemployment dropped by 17,000, leading to the record growth.
“The strong growth in employment in May followed a small decrease in April, around Easter, when employment fell by more than it usually would over the holiday period,” Jarvis said.
“Looking over the past two months, the employment increases average out to around 36,000 extra employed people each month. This is still around the average over the past year of 39,000 people a month.
“Just before the start of the pandemic, almost 13 million people were employed in Australia. In May 2023, this had risen to just over 14 million people.”
Similarly, the employment-to-population ratio rose 0.2 percentage points to 64.5% - another record high according to ABS.
“In addition to there being around a million more employed people than before the pandemic, a much higher share of the population is employed,” Jarvis said. “In May 2023, 64.5% of people 15 years or older were employed, an increase of more than two percentage points (2.1) since March 2020.”
The participation rate increased 0.1 percentage point to 66.9%. It rose 0.2 percentage points for women, to 62.7%, and remained at 71.2% for men.
Jarvis said a greater share of women in Australia are employed than ever before, with both employment to population ratio and the participation rate for women at record highs in May.
Meanwhile, monthly hours worked decreased by 1.8% (seasonally adjusted) in May, following a 2.7% increase in April when fewer people than usual were working reduced hours over the Easter period.
“Even though hours worked fell in the latest month, their strength since late 2022 - relative to employment growth - shows the demand for labour in a tight market is being met, to some extent, by people working more hours,” Jarvis said.
The proportion of employed people working fewer hours than usual was at 24.3% in May, which is higher than its May pre-pandemic average of 22.4%.
“While more people than usual worked less because they were sick (4.2%, compared with a May pre-pandemic average of 3.5%), it was much less than in May 2022 (5.8%) during the Omicron period,” Jarvis said.
The underemployment rate rose 0.3 percentage points to 6.4% in May, following a 0.1 percentage point fall in April.
Jarvis said the underemployment rate is still low in historic terms, around 2.3 percentage points lower than before the pandemic.
The underutilisation rate, which combines the unemployment and underemployment rates, rose 0.2 percentage points to 10%, which is 3.9 percentage points lower than in March 2020.
Underlying trend data
The latest monthly percentage increase in trend employment was higher than the monthly average for the 20 years before the pandemic (0.3%, compared with 0.2%), ABS data showed.
Jarvis said the trend data continues to show the strength in both employment and hours worked compared to their historical averages.
“Growth in hours worked continues to be particularly pronounced,” Jarvis said. “In trend terms, they increased around 0.4% in May 2023, which is around double the longer-term average of 0.2% and also faster than the 0.3% growth in employment.”
The unemployment rate remained at 3.5% for the tenth consecutive month, after earlier data was revised down slightly. The underemployment rate rose slightly to 6.3%.
The participation rate remained steady at 66.8% and the employment-to-population ratio remained at 64.4%.
“Looking across the range of indicators – strong growth in hours worked, the elevated employment-to-population ratio and participation rate, along with the low unemployment and underemployment rates – they all point to a continuing tight labour market," Jarvis said.