Daily Commentary BY THE CURVE TEAM –

Employment Reflects End of JobKeeper

16th of April, 2021

Underlying the strong employment numbers for March was evidence of the end of JobKeeper.

Yesterday, headline employment numbers once again beat expectations. Employment was up over 70 000, which was double the expectation.

This leaves the unemployment rate at 5.6%, still well ahead of Treasury and RBA forecast, with the RBA expecting 6% unemployment by the end of the year. The participation rate is also at record highs at 66.3%.

In contrast to the last few months, the lift in jobs was disproportionately in part time work. There were just under 92 000 part time jobs in March and a loss of nearly 21 000 full time jobs. This leaves full time employment slightly below levels of this time last year but part time employment up 77 000 on last year.

The shift likely reflects the ending of JobKeeper. Those employed but working zero hours, which include a portion of the people on JobKeeper, fell from 107 000 to 61 000.

This averaged 55 000 over 2019, so is now more in line with pre-covid levels. The surge in part time employment suggests employers have opted to keep employees on in some capacity rather than fire them.

Although the fall in full time employment suggest there was some damage from the end of JobKeeper. Given those employed but working zero hours is much more in line with pre covid levels, next month’s employment numbers should see a much lesser influence from the end of JobKeeper.

Josh Stewart

Associate - Money Markets