Labour market tightens as unemployment rate falls

Australia’s labour market tightened further after the unemployment rate declined to 3.4% in October and the economy added 32,000 jobs, according to the latest release from the Australian Bureau of Statistics (ABS).

Participation rate stayed at 66.5%, 0.2 percentage points below the historic high of 66.7% recorded in June. According to the ABS, the underemployment rate fell to 5.9% in October, while the underutilisation rate fell to 9.3%.

"The low underutilisation rate of 9.3% in October 2022 reflects the fact that there are now around 236,000 fewer unemployed people and 365,000 fewer underemployed people than in March 2020. Unemployment and underemployment are both now around two-thirds of what they were," Jarvis said.

Hours worked

Meanwhile, the seasonally adjusted monthly hours worked rose by 2.3%, stronger than the employment hike, which the ABS partly attributed to the "fewer employed people than usual taking leave during October."

"The number of people on annual leave in October 2022 was around 10% less than we typically see at this time of the year," Jarvis said.

In terms of sick leave, the ABS said there were 30% more people working reduced hours in October due to sickness. "While the number of people working fewer hours due to sickness was around a third higher than we'd usually see in October, it was no longer two to three times higher, as it was earlier in 2022. October was the first month in 2022 where the number of people was less than half a million (467,000)," Jarvis said.

Annual leave

Meanwhile, a recent report from ELMO Software revealed that 75% of Australians aren't using their annual leave due to workload and financial pressures. Danny Lessem, CEO of ELMO Software, said the findings stress the need for employers to understand why employees are choosing not to take time off.

"Is it due to unrealistic workloads, lack of resourcing, job insecurity, or because of the rising cost of living and economic uncertainty in Australia? Whatever the reason, it needs to be rapidly addressed by business leaders," Lessem said.