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Number of employed up 2.5% year-ended August

In August 2019, 12.926 million people were employed in Australia, up 2.5% on a year earlier and with 34,700 more people in work than a year earlier. At the same time, the number of unemployed people totalled 716,800, a rise of 2.2% on the prior year. That fed into an unemployment rate of 5.3% in August, up from 5.2% one year ago.

The chart below shows both part time and full-time employment, and the important participation rate. It is not quite clear in the chart, but in August, the Australian economy created 50,200 part time jobs, the largest monthly rise in more than five years. But full time jobs declined by 14,500, meaning the participation rate (the number of people in work or looking for work) rose to 66.2%.


Fig 20

To go straight to the dashboard and take a closer look at the data, click here.


In the context of rising part time and falling full time employment, the participation rate is a pretty limited measure of real participation in the economy. We can bet – in fact we know – that plenty of the people in part time work actually want more hours. That is known as Underemployment, which is displayed below, along with the number of people who are unemployed. It is a poor situation that 716,800 people are unemployed, but it is just as worrying that more than 1.167 million people are underemployed.

Combined, these two figures represent the economy-wide measure known as the Labour Underutilisation rate.


Fig 21

To go straight to the dashboard and take a closer look at the data, click here.


Underemployment may not be unemployment, but it is a scourge of the modern economy that has deep implications. Households without sufficient hours earn insufficient income and are thus unable to participate fully in our consumption driven economy. That flows its way through the entire economy, as we regularly discuss in Statistics Count.

As Stephen Letts reported in the ABC Online, the rising unemployment rate:

“…is disheartening for the Reserve Bank, which has been hoping the trend would be moving down to 4.5 per cent — its theoretical idea of full employment that would drive wages growth up.”

Speaking to Letts, BIS Oxford economist Sean Langcake suggested the data indicates the labour market appears to have turned down.

“While employment growth has been reasonably healthy over the past year, the demand for labour is being met with increased supply. This is working to keep a lid on wages growth,” Mr Langcake said.

There are other implications of unemployment and underemployment, especially wrapped up in the economy’s failure to use all of the available labour resources.

Although it’s a somewhat old measure, the Labour Underutilisation rate – the proportion of people in or seeking work who are either unemployed or under-employed – shows capacity that the labour force has, which is not being utilised. The chart shows the Labour Underutilisation Rate is rising, and has been doing so since the start of 2019. At 13.8%, it is at a year-long high and trending in the wrong direction.


Construction sector under-employment tolls its bell

The latest data released by the ABS also shows that construction sector under-employment is at near record highs. The data, reported by David Ross in The New Daily on 27th September, shows that 81,100 construction workers (6.9% of the sector’s workforce) are underemployed. Only twice before has that happened in the near thirty years the ABS has collected this data.

Speaking to The New Daily, Callum Pickering from jobs site Indeed said:

“When people finish up projects they’re left with no new jobs to go to, which is why a lot of construction workers are looking at new sectors of the economy. Over the next couple of years, from a worker perspective, employment is likely to decline.”

If that plays out as Ross and Pickering suggest, the implications for the housing sector are manifest and have implications into the future.


Less available workers for the next upturn could slow recovery by increasing labour force drag and thus, could limit opportunities for growth in building supplies sectors, like the forestry and wood products industry.

Posted Date: September 30, 2019

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