Australia’s unemployment rate falls, raising hopes for recovery

Australia’s unemployment rate fell slightly to 6.8 percent in August, spurring hopes that the worst of a coronavirus-fuelled recession may have passed.

The Australian Bureau of Statistics said on Thursday that unemployment had fallen 0.7 points from the 7.5-percent rate posted in July, with the economy adding another 111,000 jobs.

Australia is experiencing its first recession in almost 30 years, prompting the government and central bank to embark on a vast stimulus spending programme to avert a full-blown depression.

About a million people have lost their jobs and many more have been forced to take pay cuts or have seen hours slashed.

Thursday’s figures smashed economists’ forecasts of a rise in the jobless rate to about eight percent. But beyond the headline figure – which is seasonally adjusted – there was some cause for concern.

The number of people present in the job market, hours worked and underemployment remained largely unchanged – pointing to an economy still in serious pain.

‘Effective rate’

Prime Minister Scott Morrison cautioned that the “effective rate” of unemployment was still well above 10 percent, while claiming “we are doing better than almost every other developed economy in the world”.

Michele O’Neil, president of the Australian Council of Trade Unions, said “921,000 Australians are now unemployed and another 1.5 million are underemployed”, criticising the government for its plans to withdraw pandemic wage subsidies.

“Working people and the unemployed need more support, not less,” she said.

Earlier this week, Morrison unveiled plans for a “gas-fired recovery”, with proposals to build a taxpayer-funded gas power plant near Sydney, new pipeline infrastructure and encouraging drilling and fracking of vast untapped gas deposits.

Critics said the plan would lock in fossil fuel dependence for another generation in a country already ravaged by climate change.