The unemployment rate in Australia dropped to 3.5% in June 2022 from 3.9% in May 2022, the lowest since 1974, as the number of vacancies in Australia outpaced the number of unemployed people. According to the Australian Bureau of Statistics, the number of employed people increased by 88,400 in June 2022, while the number of unemployed people decreased by 54,300. The decrease in the unemployment rate is a result of a higher-than-average number of people entering employment and a lower-than-average number of people in employment becoming unemployed.
Number of Active Jobs in Australia
Along with an increasing proportion of the employed population, the number of jobs is also increasing. According to GlobalData’s Job Analytics, Australia had 65,580 active jobs in June 2022, whereas May 2022 registered the maximum number of active jobs with 65,735 postings for job vacancies. During the period June 2021–June 2022, Australia registered a 51% increase in the number of active jobs. However, the rate of month-over-month growth in vacancies slowed down in December 2021.
Impact on Economy
Even with a record low unemployment rate and record high job vacancies, the annual wage growth rate was 2.4% in March 2022 in contrast with inflation, which increased 5.1%, according to the Australian Bureau of Statistics. The monthly hours worked decreased in June 2022 by less than 0.1% after increasing in the previous two months. Due to a spurt in COVID-19 cases in June, a lot of people continued to work for fewer hours as a result of illness.
The gap between the number of unemployed people and job vacancies narrowed, which exacerbates the ongoing shortage of labor. The shortfall affected both skilled and unskilled workers and has had a ripple effect on supply chains and sectors such as tourism, mining, and airports. The low unemployment rate, combined with increasing inflation, would exert pressure on the Reserve Bank of Australia to continue raising interest rates rapidly to tame the rising inflation.
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