Shock: Unemployment drops to 6.8%, 111,000 jobs added

The Australian unemployment rate has fallen to 6.8 per cent, according to ABS figures released today.

The August data marks a decrease of 0.7 percentage points on the July unemployment rate of 7.5 per cent, with 921,800 million people now considered unemployed.

This represents a decrease of 87,000 unemployed month-to-month as the economy added another 111,000 jobs even amid Victoria’s second wave.

The underemployment rate remained at 11.2 per cent and was 2.7 points higher than in August 2019.

The number of underemployed people decreased by 7,100 in August 2020 to 1,506,800 people, and increased by 29.9 per cent or 346,800 people since August 2019.

The news comes as some surprise given July’s unemployment reached 7.5 per cent and expectation was for the figure to worsen due to Victoria’s imposed stage-four lockdown measures.

Unsurprisingly, in Victoria the jobless rate lifted 7.1 per cent in August, from 6.8 per cent. Tasmania also saw an increase in its jobless rate to 6.3 per cent in August, from 6.0 per cent in July. South Australia remained steady at 7.9 per cent.

However, unemployment rates decreased in all other states and territories. The largest fall in the unemployment rate was seen in the Northern Territory (down 3.3 pts to 4.2 per cent).

The participation rate only improved by 0.1 percentage points over the month.

“The large increase in seasonally adjusted employment coincided with a large decrease in unemployment of 87,000 people, around 55,000 of whom were females,” ABS head of labour statistics, Bjorn Jarvis said.

However, the large changes in employment and unemployment did not coincide with a large increase in participation, with the participation rate increasing by just 0.1 percentage points. It remained 1.1 percentage points below March (when it was 65.9 per cent).

"The August data provides insights into the labour market impacts from the Stage 4 restrictions in Victoria. In addition to the large fall in hours worked, employment in Victoria also decreased by 42,400 people and the unemployment rate increased to 7.1 per cent,” said Jarvis.

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