Business

Unemployed tops one million for first time

Unemployed tops one million for first time

More than one million Australians are out of work for the first time since records began, with the unemployment rate climbing slightly to 7.5 per cent.

The situation could get much worse, given the latest jobless figures do not reflect the impact of Melbourne’s stage four lockdowns, which came into effect last week.

The unemployment rate rose to 7.5 per cent in July from 7.4 per cent the previous month, despite another large jump in the number of people who found work.

Employment Minister Michaelia Cash said every job lost as a result of coronavirus was devastating.

But she said the latest Australian Bureau of Statistics data showed there was underlying resilience in the economy, with a further 114,700 people returning to work.

This built on the revised 252,000 increase in employment in June.

July’s rise included 43,500 full-time and 71,200 part-time positions.

“That shows you that, when you get the health crisis under control, then across Australia you are able to ease restrictions, reopen your economy, you will see those jobs returning,” Senator Cash told reporters in Perth.

The participation rate — those people in work or actively seeking employment — rose to 64.7 per cent, causing the unemployment rate to rise.

However, the ABS said the number of people employed was still more than half a million lower than seen in March when the virus first hit Australia’s shores.

Shadow treasurer Jim Chalmers said the increase in unemployment was confronting.

“Australians can’t afford to wait until the October budget to hear a proper plan for jobs from the Morrison government,” Dr Chalmers told reporters in Brisbane.

ACTU president Michelle O’Neil said despite the alarming jobless numbers, the rate of unemployment was being kept artificially low by the 3.5 million people on JobKeeper wage subsidies.

“The million Australians now out of a job and the millions more who are either reliant on JobKeeper or worried about their futures need leadership from this government,” she said in a statement.

BIS Oxford Economics chief economist Sarah Hunter expects employment will slip back in August as Victoria’s stage four restrictions are felt.

“The requirement to actively seek work to continue receiving JobSeeker (dole payment) being reintroduced in early August, the unemployment rate is set to track higher,” Dr Hunter said.

The Reserve Bank expects the unemployment rate to hit 10 per cent by the end of this year and still be about seven per cent in two years time.

Reserve Bank governor Philip Lowe will be grilled on this outlook when he faces federal politicians on Friday.