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Australia's unemployment rate has edged lower to 3.6 per cent, but only because fewer Australians have been looking for work.
Key points:
- The ABS estimates less than 7,000 jobs were created last month
- The unemployment rate fell, but only because workforce participation dropped from record high levels
- Economists say the data does little to shift the dial on what is currently seen as a 25 per cent chance of a rate rise in November
The Australian Bureau of Statistics (ABS) estimates that just 6,700 jobs were created last month, which is not enough to keep up with the growth in Australia's working-age population.
"The labour market needs to generate around 37,000 jobs a month currently to keep the unemployment rate flat on an unchanged participation rate," CBA's head of Australian economics Gareth Aird observed.
However, the participation rate — which measures the proportion of people aged 15 and over either in work or actively looking for it — dropped sharply from 67 per cent to 66.7 per cent, pushing unemployment lower.
"The fall in the unemployment rate in September mainly reflected a higher proportion of people moving from being unemployed to not in the labour force," Kate Lamb, ABS head of labour statistics, said.
"The participation rate fell 0.2 percentage points to 66.7 per cent from last month's record high of 67.0 per cent but remained well above levels before the COVID-19 pandemic."
Ms Lamb said some of the weakness in job creation might be due to statistical noise.
"Looking over the past two months, average monthly employment growth was 35,000 people, around the average growth we've seen in the past year," she said.
Although hours worked have declined for a second straight month, off 0.4 per cent in September after a 0.5 per cent drop in August.
"The recent softening in hours worked, relative to employment growth, may suggest an easing in labour market strength, though it also follows particularly strong growth over the past year," Ms Lamb added.
Small business owners feeling the pinch may cut working hours
On a trip to Melbourne's west, traders along a popular arcade told ABC News that trade was getting weaker as the cost of living bites.
Solomon Gebremariam manages a cosmetics and hair product shop that employs about 15 people across several stores as well as a warehouse.
"Somehow we are surviving," he said.
The business is expecting to boost its workforce to 20 people over Christmas but will later assess if it needs to let people go.
"If things continue in this direction, of course, we may have to cut some staff or the number of hours," Mr Gebremariam said.
"We are waiting and seeing."
CreditorWatch data show the annual value of invoices for small businesses has been decreasing for some time, which its chief economist Anneke Thompson said shows many are under the pump.
"This suggests that smaller businesses are probably feeling the slowdown in business conditions earlier than bigger businesses, and reducing hours of work offered as a result," she argued.
This increasing caution from employers appears to be showing up in the ABS data, which show a big jump in part-time employment, while full-time jobs have flat-lined for the past six months.
"Over that six-month period, Australian employment has increased by almost 160,000 people but all of those gains have been part-time," noted Callam Pickering, Asia-Pacific economist for jobs website Indeed.
"This is in stark contrast to the full-time-led jobs boom that we have experienced since the end of the pandemic."
Down the hall, Tehiya Umel works in a fashion store owned by her sister.
She is worried about having her hours cut.
"Sometimes [my sister] can't afford to pay for workers," Ms Umel said.
"Sometimes we don't sell anything.
"I have mortgage, bills, shopping. Everything is getting expensive. Life is so tough."
Record numbers of Australians working multiple jobs
With pressure on working hours creeping in on top of the rising cost of living, it is little wonder a record 958,600 Australians are working two or more jobs, according to the most recent ABS data.
Fifty-two-year-old Jodie Moon is one of them, along with many people she knows.
"All of my friends have a second job. We're all suffering, especially us single ladies," she lamented.
Working full-time as a company debt collector, Ms Moon took up a part-time night and weekend job as a beautician in March to cope with the surging cost of living.
"I can't pay all my bills with the one job," she explained.
"I work a full day at my first job and then I drive for half an hour to my second job and work to nine o'clock with no break.
"It's exhausting. At 52, it is very tiring."
Ms Moon hopes to cut back on her hours one day and ultimately aspires to open her own beauty studio.
"I would really love to start my own business but I've got to save money to start that," she said.
'Little that will move the needle' on interest rates
Sean Langcake from Oxford Economics Australia said it was too early to definitively call a turning point for Australia's jobs market, meaning other economic indicators would determine the Reserve Bank's next moves on interest rates.
"The RBA's hawkish communications over the past week have increased the chances for a rate hike in November. There is likely little in today's data that [will] move the needle either way," he noted.
"There are nascent signs the labour market is slackening, but this is a slow process and the market remains very tight.
"The upcoming CPI data next week will be the key piece of data heading into the November meeting."
The ABS will release the latest monthly and quarterly consumer price indices (CPI) for September on Wednesday next week.
Most economists are expecting annual inflation to continue easing from 6 per cent in the June quarter to somewhere between 5-5.4 per cent in the latest data.
Current market pricing has the odds of a November interest rate rise by the RBA at around 25 per cent, but an inflation number above most forecasts and around the mid-5s would substantially raise those odds.