At the moment (March 20, 2025), the Australian Bureau of Statistics launched the newest – Labour Pressure, Australia – for February 2025. The contraction in general employment progress, the participation charge, and the employment-population ratio are all indicators of a deteriorating scenario. Unemployment at all times lags behind the employment dynamics due to the participation charge actions, which implies that the scenario is worse than the unemployment charge indicators. The official unemployment charge was a gentle 4.1 per cent but when we regulate for the altering participation then the underlying charge is about 4.7 per cent. That implies that the 97.5 thousand LESS staff within the labour pressure as a result of falling participation have entreed the ranks of the hidden unemployed. We also needs to not disregard the truth that there may be nonetheless 9.9 per cent of the working age inhabitants (round 1.5 million folks) who can be found and keen however can’t discover sufficient work – both unemployed or underemployed and that proportion is growing. Australia isn’t close to full employment regardless of the claims by the mainstream commentators and it’s arduous to characterise this as a ‘tight’ labour market.
The abstract ABS Labour Pressure (seasonally adjusted) estimates for February 2025 are:
- Employment fell 52,800 (-0.4 per cent) – full-time employment fell by 35.7 thousand (=0.4 per cent) and part-time employment fell by 17 thousand (-0.4 per cent). Half-time share of whole was 30.6 per cent.
- Unemployment fell 11,200 to 612,600 individuals.
- The official unemployment charge was regular at 4.1 per cent.
- The participation charge fell 0.4 factors to 66.8 per cent.
- The employment-population ratio fell 0.3 factors to 64.1 per cent.
- Mixture month-to-month hours fell 8 million hours (-0.4 per cent).
- Underemployment charge fell 0.1 level to five.9 per cent – underemployment fell 19.9 thousand. General there are 887.3 thousand underemployed staff. The entire labour underutilisation charge (unemployment plus underemployment) fell 0.2 factors to 9.9 per cent. There have been a complete of 1499.9 thousand staff both unemployed or underemployed.
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The ABS Media Launch (March 20, 2025) – Unemployment charge stays regular at 4.1% in February – famous that:
The seasonally adjusted unemployment charge remained regular at 4.1 per cent in February …
With employment falling by 53,000 folks and the variety of unemployed falling by 11,000 folks, the unemployment charge remained at 4.1 per cent …
Seasonally adjusted month-to-month hours labored fell by 0.4 per cent in February 2025, according to the share fall in employment …
The underemployment charge decreased 0.1 share factors to five.9 per cent in February 2025 …
The underutilisation charge, which mixes the unemployment and underemployment charges, decreased 0.2 share factors to 9.9 per cent. This was 4.0 share factors decrease than March 2020.
Basic conclusion:
1. Employment progress contracted in February and participation fell which was the one cause that the unemployment charge was regular.
2. Had the participation charge not fallen by 0.4 factors, the unemployment charge would have been 4.7 per cent moderately than the official charge of 4.1 per cent (see under for particulars).
Employment fell 52.8 thousand0 (-0.4 per cent) in February 2025
1. Full-time employment fell by 35.7 thousand (=0.4 per cent) and part-time employment fell by 17 thousand (-0.4 per cent).
2. The employment-population ratio fell 0.3 factors to 64.1 per cent.
The next graph present the month by month progress in whole, full-time, and part-time employment for the 24 months to January 2024 utilizing seasonally adjusted information.
The next desk offers an accounting abstract of the labour market efficiency during the last six months to offer an extended perspective that cuts by way of the month-to-month variability and offers a greater evaluation of the tendencies.
Given the variation within the labour pressure estimates, it’s typically helpful to look at the Employment-to-Inhabitants ratio (%) as a result of the underlying inhabitants estimates (denominator) are much less cyclical and topic to variation than the labour pressure estimates. That is an alternate measure of the robustness of exercise to the unemployment charge, which is delicate to these labour pressure swings.
The next graph exhibits the Employment-to-Inhabitants ratio, since April 2008 (that’s, for the reason that GFC).
The employment-to-population ratio declined again to the comparatively secure degree that we’ve seen since 2022.
For perspective, the next graph exhibits the typical month-to-month employment change for the calendar years from 1980 to 2024.
1. The common employment change over 2020 was -10.6 thousand which rose to 34.9 thousand in 2021 because the lockdowns eased.
2. For 2022, the typical month-to-month change was 44.5 thousand, for 2023, the typical change was 30.7 thousand, and for 2024, the typical month-to-month change was 34.4 thousand.
3. The common (up to now) for 2025 (one commentary) is -11.2 thousand – which is troublesome to interpret given solely 2 observations can be found.
The next graph exhibits the typical month-to-month adjustments in Full-time and Half-time employment in 1000’s since 1980.
Mixture month-to-month hours fell 7.8 million or 0.4 per cent
The next graph exhibits the month-to-month progress (in per cent) during the last 24 months.
The darkish linear line is an easy regression development of the month-to-month change.
Unemployment fell 11,200 to 612,600 individuals in February 2025
The drop in participation was the one cause the unemployment charge didn’t improve this month given the drop in employment.
See under for the participation impact.
The next graph exhibits the nationwide unemployment charge from April 1980 to February 2025. The longer time-series helps body some perspective to what’s taking place at current.
What was the affect of the declining participation charge on unemployment in February 2025
The query is what would the unemployment charge have been, given the numerous employment progress in January, if the participation charge had not risen and dragged extra staff in to the labour pressure?
These ideas assist us reply one of these query:
- The labour pressure is a subset of the working-age inhabitants (these above 15 years outdated). The proportion of the working-age inhabitants that constitutes the labour pressure known as the labour pressure participation charge. Thus adjustments within the labour pressure can affect on the official unemployment charge, and, consequently, actions within the latter should be interpreted rigorously. A rising unemployment charge could not point out a recessing economic system.
- The labour pressure can develop because of normal inhabitants progress and/or will increase within the labour pressure participation charges (and vice versa).
The next Desk exhibits the breakdown within the adjustments to the principle aggregates (Labour Pressure, Employment and Unemployment) and the affect of the autumn within the participation charge.
The change within the labour pressure in February 2025 was the result of two separate elements:
- The underlying inhabitants progress added 33.6 thousand individuals to the labour pressure. The inhabitants progress affect on the labour pressure mixture is comparatively regular from month to month; and
- The autumn within the participation charge meant that there have been 97.5 thousand LESS staff within the labour pressure (relative to what would have occurred had the participation charge remained unchanged).
- The online end result was that the labour pressure fell by 63.9 thousand.
Evaluation:
1. If the participation charge had not have fallen in February 2025, whole unemployment, given the present employment degree, would have been 710.1 thousand moderately than the official rely of 612.6 thousand as recorded by the ABS – a distinction of 97.5 thousand staff (the ‘participation impact’).
2. With out the autumn within the participation charge, the official unemployment charge would have been 4.7 per cent (rounded) moderately than its present official worth of 4.1 per cent).
Broad labour underutilisation fell 0.2 factors to 9.9 per cent in February 2025
1. Underemployment charge fell 0.1 level to five.9 per cent – underemployment fell 19.9 thousand.
2. General there are 887.3 thousand underemployed staff.
3. The entire labour underutilisation charge (unemployment plus underemployment) fell 0.2 factors to 9.9 per cent.
4. There have been a complete of 1499.9 thousand staff both unemployed or underemployed.
Evaluation:
The decline in general labour underutilisation must be seen within the context of the declining participation charge and falling employment.
Hidden unemployment clearly rose and brought collectively signifies a slowing within the labour market in February.
The next graph plots the seasonally-adjusted underemployment charge in Australia from April 1980 to the February 2025 (blue line) and the broad underutilisation charge over the identical interval (inexperienced line).
The distinction between the 2 traces is the unemployment charge.
Teenage labour market – defies the general motion in February 2025
Whereas whole employment contracted in February 2025, general teenage employment rose by 10.8 thousand with full-time employment rising by 0.3 thousand and part-time employment growing by 10.6 thousand.
The next Desk exhibits the distribution of web employment creation within the final month and the final 12 months by full-time/part-time standing and age/gender class (15-19 12 months olds and the remaining).
To place the teenage employment scenario in a scale context (relative to their measurement within the inhabitants) the next graph exhibits the Employment-Inhabitants ratios for males, females and whole 15-19 12 months olds since July 2008.
You’ll be able to interpret this graph as depicting the change in employment relative to the underlying inhabitants of every cohort.
By way of the latest dynamics:
1. The male ratio fell 0.1 level over the month.
2. The feminine ratio rose 1.0 level over the month.
3. The general teenage employment-population ratio rose 0.5 factors over the month.
Conclusion
My commonplace month-to-month warning: we at all times should watch out decoding month to month actions given the best way the Labour Pressure Survey is constructed and applied.
My general evaluation is:
1. The contraction in general employment progress, the participation charge, and the employment-population ratio are all indicators of a deteriorating scenario.
2. Unemployment at all times lags behind the employment dynamics due to the participation charge actions, which implies that the scenario is worse than the unemployment charge indicators.
3. Nonetheless, it’s clear that the 97.5 thousand LESS staff within the labour pressure as a result of falling participation will imply that hidden unemployment has risen by round that a lot.
4. We must always not disregard the truth that there may be nonetheless 9.9 per cent of the working age inhabitants (round 1.5 million folks) who can be found and keen however can’t discover sufficient work – both unemployed or underemployed and that proportion is growing.
5. Australia isn’t close to full employment regardless of the claims by the mainstream commentators and it’s arduous to characterise this as a ‘tight’ labour market.
That’s sufficient for at this time!
(c) Copyright 2025 William Mitchell. All Rights Reserved.