Daily Commentary BY THE CURVE TEAM –

JobKeeper Effects Employment Numbers

21st of May, 2021

Employment for April had some quirks which could easily be misconstrued.

Unemployment fell from 5.7% to 5.5%, but overall employment was down 30 600. The decrease in unemployment as employment fell was due to the 0.3%-point fall to 66% in the participation rate, with unemployed people falling 33 600.

It is hard to discern what effect JobKeeper had on the numbers, given seasonality of the April holidays was also a factor in the numbers. However, the labour market is undoubtedly strong now that JobKeeper has ended.

Employment is 0.4% higher than this time last year and unemployment only 0.2% points higher. Full time rose 34 000 over the month after a dip last month, whereas part time was down 64 000.

The move back to full time employment bodes well for future months. Underemployment is at 7.8%, the lowest since 2013.

Further, those employed but working zero hours, which has been used as an indicator of the JobKeeper impact, was again down to 61.8 thousand from 64 thousand. Pre-covid levels averaged 55 000.

Business surveys indicate there is still a bias to employing people rather than letting people go, and vacancies are at elevated levels. So the momentum in employment still seems strong.

A developing theme in advanced economies is jobs not being filled despite people not it working, especially for jobs that would usually be filled by migrants. It will be interesting to see whether this dynamic weighs down on employment going forward.

Josh Stewart

Associate - Money Markets