Australia’s youth unemployment rate has fallen to just 7%, new data shows, suggesting businesses reliant on junior staff may find it difficult to build their headcount ahead of the looming Christmas rush.
On Thursday, the Australian Bureau of Statistics (ABS) revealed the headline unemployment rate dropped to 3.4% in July — 0.1% below June’s reading, which was already the lowest unemployment rate since 1974.
One notable factor was surging youth employment. 13,000 more people aged between 15 and 24 years old were classified as employed in July compared to June, representing a 0.7% uptick.
Today’s youth unemployment rate of 7% is the lowest recorded since that monthly data series began in 1978.
A big positive in Australia’s July labour market data was the 0.9ppt drop in youth unemployment, to a series low of 7.0%. When the labour market is tight, it becomes easier for people with less experience and skill to find a job. #ausecon #ausbiz @cfbirch pic.twitter.com/xkuadGaOmJ
— ANZ_Research (@ANZ_Research) August 18, 2022
While tightness in the labour market is good news for young jobseekers who may find themselves in roles previously reserved for more experienced applicants, it also suggests employers may find it harder to fill early-career roles in late 2022 than in years gone by.
Facing the prospect of low staff numbers ahead of the Christmas rush, Australia’s retail and food service sectors have already gone on the charm offensive.
On Thursday, the Australian Retailers Association (ARA) announced a new partnership with in-school job education firm The Careers Department to highlight the benefits of retail jobs to young audiences.
“Retail is where many of us started off our careers and it provides many Australians with their first employment experience,” ARA CEO Paul Zahra said.
“One in 10 Australians work in retail and the sector employs more young people than most.”
And earlier this month, Eastland Shopping Centre, one of Melbourne’s largest retail hotspots, used its inaugural jobs fair to advertise 150 roles available in the lead-up to Christmas.
Retailers at the centre have “a significant number of vacancies to fill”, ahead of the busy Christmas period, Eastland general manager Greg Balmforth said.
Overall, the data shows Australia’s labour market remains extremely tight, as the number of unemployed people fell an additional 20,200 over July.
However, the number of jobs actually fell 40,900, or 0.3%, over the month.
The fact the headline unemployment rate fell, despite a nominal decrease in employed Australians, is largely a function of a falling participation rate.
The participation rate — the number of employed Australians, and those actively looking for a job, represented as a percentage of the working age population — fell 0.3% over the month to 66.4%.
This suggests the number of Australians classified as ‘in the workforce’ declined slightly in July, even if the number of unemployed Australians also fell.
The large number of workers taking sick leave or on holiday may have contributed to the falling participation rate, as the ABS survey considers workers on leave at the time of its monthly surveys as neither ‘in work’ nor ‘looking for work’.
“In addition to people taking annual leave around the winter school holidays, there were also around 750,000 people working fewer hours than usual due to being sick in July 2022, around double the usual number we see during the middle of winter,” said Bjorn Jarvis, the ABS’ head of labour force statistics.
“Given the extent of sickness within the community during July, some people who were on annual leave over the school holidays may have also been sick or caring for others.”
With sickness and holidays a key factor in the falling participation rate, analysts suggest July’s cooling off is transitory, as the labour market remains extraordinarily tight.
“We think the employment and participation falls are a temporary reversion after rapid improvement over recent months,” said ANZ senior economist Catherine Birch.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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