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Both unemployment and underemployment have continued their downward trends in further positive signs that Australia's economy is bouncing back quickly from COVID-19.
Key points:
- Employment rose for the fourth consecutive month, leaving unemployment lower at 6.4 per cent
- Underemployment fell and is now below pre-pandemic levels at 8.1 per cent
- Victoria led the jobs recovery, and now has a smaller gap to pre-COVID employment levels than the Australian average
The official jobless rate dipped again from 6.6 per cent in December to 6.4 per cent in January, with the ABS estimating that 29,100 extra people were employed last month.
"January 2021 was the fourth consecutive monthly rise in employment, as employment in Victoria continued to recover," ABS head of labour statistics Bjorn Jarvis observed.
AMP Capital senior economist Diana Mousina said 93 per cent of the jobs lost at the peak of the COVID-19 first wave in April and May had now been recovered.
"In comparison, only around 56 per cent of US jobs have been recouped, which shows that Australian fiscal policy has worked to keep people employed [through JobKeeper] along with good management of the virus, which helps to keep mobility higher than otherwise, which lifts economic activity," she observed.
"The recovery in the Australian labour market has also progressed much quicker compared to other recessions — normally it takes a few years for employment to get back to its pre-recession levels."
In even better news, those jobs were driven by a 59,000-strong increase in full-time positions, while part-time work declined.
That led the underemployment rate to fall below pre-pandemic levels, at 8.1 per cent.
Still a hundred-plus applicants for many jobs
While the official jobs numbers are showing a very strong recovery, Sydney-based recruiter Suzanne Shiel said she was still inundated whenever she posted a job ad.
"It's still a tough market from a candidate's point of view," she said.
"Every time that we advertise a job — unless the job is very, very specific in its requirements, but if it's a more generalist type of role — in a day, we'll easily get over a hundred applications.
Ms Shiel works mainly in the education sector, and said there were huge numbers of applicants for administrative and accounts roles.
"There's just not enough work to go round for the numbers of people that are looking," she said.
"I'm not talking about people who aren't well qualified to work, and they're people who are very actively looking for work as well."
However, she is also starting to see more employers looking to hire after a huge drop-off at the peak of the pandemic last year.
Victorian bounce leads nation
Jobs website Indeed's Asia-Pacific economist, Callam Pickering, said the positive data would give the federal government more confidence that it could remove JobKeeper and further roll back JobSeeker at the end of March without triggering an economic collapse.
"Policymakers would be particularly pleased with today's jobs report, with the recovery progressing faster than originally expected," he wrote.
"This won't change monetary policy [interest rates] but would certainly leave the federal government feeling more confident."
However, Mr Pickering said policymakers should be concerned that jobs growth was heavily concentrated in Victoria, which was now outperforming the national average jobs recovery.
"In fact, employment fell across the rest of Australia," he observed.
Loading"The reopening of the Victorian economy is therefore the primary driver of January's employment gains.
"The lack of momentum elsewhere is potentially a cause for concern, as it indicates that the overall recovery will slow considerably once the impact of Victoria's reopening diminishes.
"Remarkably, Victorian employment is now 0.4 per cent below its pre-crisis peak, comparing favourably to the 0.5 per cent gap for the rest of Australia."
Another area of concern is youth unemployment, which remained stubbornly high at 13.9 per cent, while youth workforce participation fell 0.2 per centage points.
Hours worked also dropped 4.9 per cent on a seasonally adjusted basis.
But the ABS has attributed this to a larger-than-usual proportion of Australians taking annual leave in January given the harsher travel restrictions in place for much of 2020.
"However, the number of employed people who worked zero hours in early January in the capital cities also reflects some ongoing effects of recent lockdowns in Sydney and Melbourne."