Unemployment rate falls as 111,000 jobs added in August, despite Melbourne lockdown


Australia's unemployment rate has posted a surprise fall, with 111,000 jobs created last month despite a lockdown in the nation's second-most populous state.

Unemployment hit 7.5 per cent in July, but fell to 6.8 per cent in August, even though Melbourne was totally locked down and regional Victoria under stage 3 restrictions.

The Bureau of Statistics figures appear to show the bounce-back in jobs is real, rather than a statistical illusion, with internationally comparable measures also showing a big drop in unemployment.

If Australia measured unemployment the same way as the US — including stood-down workers as unemployed — then the jobless rate would be 7.9 per cent, down from a high of 11.8 per cent in April.

Australia's unemployment rate fell sharply last month after peaking at 7.5 per cent in July.
Australia's unemployment rate fell sharply last month after peaking at 7.5 per cent in July.(ABC News: Stephen Letts/Refinitiv/ABS)

Marcel Theliant from Capital Economics said the numbers appeared to show that recent Reserve Bank and Treasury forecasts were wildly pessimistic.

"While mutual obligations that required jobless people to start looking for a job were introduced in August, the unemployment rate dropped from 7.5 per cent to 6.8 per cent," he noted.

"The upshot is that the labour market is now unlikely to climb to 8.5 per cent [unemployment] over the coming months as we had anticipated, let alone the 10 per cent predicted by the RBA and the Treasury.

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Ian Verrender analyses the latest jobs numbers

Victoria the unemployment epicentre

Those restrictions cannot end soon enough for many unemployed Victorians.

Melbourne couple Kirby and Kyle Neil have been adjusting to a significantly reduced income since Kyle lost his job in March and Kirby were forced to shut down her hair salon.

Man and woman sit next to each other facing the camera.
Kyle and Kirby Neil are getting by on about a third of their usual income with JobSeeker and JobKeeper payments.(ABC News: Peter Drought)

"Our household income has been taken down to a third of what we'd usually earn," said Ms Neil, who is on JobKeeper.

While they have managed to reduce their rent and car repayments, and stage 4 lockdown means they are not spending as much as they used to, there are still a lot of expenses to meet.

"We've still got phone bills, water, electricity, gas bills — you can only go so far before it keeps on banking upon you," Mr Neil said.

His former employer does not expect he will be able to rehire him until at least March next year. He worked as a contractor in a customer-facing role prior to the pandemic, and started receiving JobSeeker payments in March.

Before then, JobSeeker payments will be slashed by $300 to $815.70 a fortnight (a change that comes in at the end of next week), and will revert to the old $282.85 a week payment from January 1 — unless the Government extends a higher rate.

All the while, the delayed rent and car repayments are adding up.

"That's the bit that we're struggling on, is what's going to happen on the other side of it," Mr Neil said.

The couple married in March, just days before the Commonwealth and state governments began shutting parts of the economy down.

With their income now reliant on government support, they have put other life decisions on hold.

The Neils hope the Victorian Government allows hair salons to reopen sooner than the anticipated October 26 deadline, so Ms Neil can start earning money again."I feel like now is the time that we were wanting to start a family, buy a house, all of that sort of stuff and now, whether it's been pushed back or whether we aren't able to do it, that's a big part of what's playing on our minds as well," said Mr Neil.

On that date, the salon will have been closed for 18 weeks this year.

"We just need to have our restrictions eased up a little bit, let's get everybody back out, stimulate the economy and get our communities back together," Ms Neil said.

The latest ABS data confirms that Melbourne has now become the epicentre of the nation's unemployment crisis, following the second wave of coronavirus and a hard lockdown during August that is dragging through September as well.

"Hours [worked] fell by 4.8 per cent in Victoria, compared to a 1.8 per cent increase across the rest of Australia," noted ABS head of labour statistics Bjorn Jarvis.

However, while Victoria was the only state to report a fall in employment last month, its jobless rate was not the nation's highest.

Graph showing relative job losses between Victoria and the rest of Australia during the coronavirus pandemic.
Victoria initially had fewer job losses than the rest of Australia at the start of the pandemic, but that changed with the second wave of COVID-19.(Supplied: ABS)

Jobless rate still high across the nation

The dubious honour of the nation's highest unemployment rate went to South Australia in August, at 7.9 per cent.

Graph showing unemployment rates by state.
South Australia had the nation's highest unemployment rate in August at 7.9 per cent.(ABC News: Stephen Letts/Refinitiv/ABS)

The two territories had the nation's lowest unemployment rates, with both the ACT and NT at 4.3 per cent.

Despite having very low rates of coronavirus in the community, Queensland had the nation's second-highest jobless rate of 7.5 per cent.

That is something Amber Pereira is living through, telling the ABC that competition for work in Brisbane is tough.

"A lot of people are applying for jobs at the moment, my mum as well is applying for a new job, so it's really hard," she told The Business.

Amber Pereira sits at home holding a pen on her tablet.
Amber Pereira has been selling some of her illustrations to family and friends while looking for ongoing work.(ABC News: Dean Caton)

The former medical receptionist was dealt a double blow when she lost her job in March.

"It was just when my old lease was ending," she explained.

While the job search continues, Ms Pereira is keeping busy drawing.
"I moved back in with my mum for a while and I'm currently living with my partner and a housemate."

It could become a silver lining for her if the job hunt continues to prove unsuccessful.

"I've started doing some art commissions and drawing just to stay occupied, I don't want to just stay home all day," she said.

"I've made a little website and everything."

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