The unemployment rate in Australia unexpectedly fell to 6.8 percent in August, after another large increase in employment was reported with the relaxation of COVID-19 restrictions in most states.
The unemployment rate fell from a 22-year high of 7.5 percent in July, but is still well above the 5.1 percent observed in February when the pandemic first hit the Australian coast.
The unemployment rate has fallen below a million from a record high in July, according to figures released Thursday by the Australian Bureau of Statistics.
Treasurer Josh Frydenberg said 458,000 new jobs have been created in the past three months, with a particularly strong performance at NSW.
Of those jobs, 60 percent had gone to women and 40 percent to young people, he said.
But Mr. Frydenberg acknowledged that despite the good news, many Australians were struggling.
“Despite this fall today … many Australians are struggling. And the road to recovery will be long, it will be difficult and it will be bumpy,” he said.
“The effective unemployment rate, which takes into account not only those who are officially unemployed, but also those who have left the labor force or seen their hours cut to zero, has dropped from 9.8 percent to 9.3 percent. still remains high. “
The Reserve Bank and Treasury have both forecast that the unemployment rate will rise to 10 percent by the end of the year, with an additional 400,000 people entering the queue.
The workforce increased by 111,000, the third month of exceptionally strong increases when restrictions were lifted.
The number of full-time jobs increased by 36,200, while the number of part-time jobs increased by 74,800.
The employment rate of workers or jobseekers rose from 64.7 percent to 64.8 percent.
Economists’ forecasts aimed at a reduction of 35,000 jobs in the month, with the unemployment rate rising to 7.7 percent.
Virus support ‘must be phased out’
Officials predict an increase in the number of Jobseeker recipients following the cut in the JobKeeper scheme next week.
The subsidy scheme is split in two, separating full-time and part-time employees. Some part-time workers may apply for both JobKeeper and JobSeeker benefits.
A new report from the McKell Institute has shown that cutting payments for Christmas will take nearly $ 10 billion out of the economy, but Prime Minister Scott Morrison insisted that both JobSeeker and JobKeeper should be phased out.
“These things cannot come in the never never and must be phased out,” he said Thursday.
“We have to get away from them.”
The institute found that 1.05 million part-time workers would see their $ 1,500 weekly allowance for JobKeeper cut to $ 750 from September 29.
For an additional 2.4 million full-time employees, their payments would be reduced to $ 1,200.
The institute found that the Commonwealth would spend $ 1.52 billion less on JobKeeper every fortnight than it would if the original rate stayed, which equates to a $ 9.9 billion reduction in tax aid by Christmas.
The OECD has released a separate report warning against “premature fiscal tightening” when economies are still fragile.
Shadow Treasurer Jim Chalmers said it was too early to roll back support for the coronavirus.
“During the deepest recession in nearly a century and an escalating job crisis, it makes no sense for the Morrison administration to withdraw support from the economy without a comprehensive job plan to replace it,” he told AAP.
Morrison told reporters that the “effective rate” of unemployment was still well above 10 percent and the government wanted to see that fall.
“We’ve made tough but balanced decisions, which means we’re doing better in health and jobs and the economy than we do in almost any other developed economy in the world,” he said.
Still, the Morrison administration plans to cut the pandemic-boosted JobSeeker benefits by $ 300 by the end of next week.
Payment must go back to the original Newstart allowance of $ 40 per day in December.
More than $ 12.3 billion has been spent on coronavirus supplements to help job seekers and other benefit recipients cope with the fallout.
An analysis by Deloitte Access Economics commissioned by the Australian Council of Social Service shows that cuts in additional payments will cost the economy $ 31 billion.
Deloitte also found that 145,000 full-time jobs could be lost if JobSeeker is dropped, fueled by a dip in consumer spending.
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