Employment and hours below pre-pandemic levels

Seasonally adjusted employment fell by 138,000 people (1.1 per cent) between August and September 2021, according to figures released today by the Australian Bureau of Statistics (ABS).

Bjorn Jarvis, head of labour statistics at the ABS, said: “Extended lockdowns in New South Wales, Victoria and the Australian Capital Territory have seen employment and hours worked both drop back below their pre-pandemic levels.

In September 2021, there were 111,000 fewer employed people (0.9 per cent) and 2.0 per cent fewer hours worked than in March 2020.”

With a combined share of close to 60 per cent of Australia’s employed population, labour market changes in New South Wales and Victoria continued to have a large influence on the national figures.

“In September, there were large falls in employment in Victoria (123,000 people) and New South Wales (25,000 people, following the 173,000 decline in August). This was partly offset by a 31,000 increase in Queensland, as conditions there recovered from the lockdown in early August,” Mr Jarvis said.

The participation rate fell 0.7 percentage points to 64.5 per cent. This was the third consecutive monthly decline from the near historic high of 66.2 per cent in June 2021 and continued the pattern of large falls in participation during lockdowns.

The unemployment rate rose 0.1 percentage points from 4.5 per cent to 4.6 per cent in September 2021.

“The low national unemployment rate continues to reflect reduced participation during the recent lockdowns, rather than strong labour market conditions,” Mr Jarvis said.

The fall in the national participation rate was again underpinned by large drops in parts of the country with lockdowns in effect. The participation rates for Victoria and the Australian Capital Territory both fell by 1.9 percentage points, and in New South Wales by a further 0.6 percentage points, following a 2.5 percentage point drop last month.

In September, New South Wales and the Australian Capital Territory both recorded their lowest participation rates since the pandemic began. Victoria’s participation rate also fell but remained above the previous low during the second wave lockdown last year.

"Over the past three months, participation in the labour force has fallen by over 330,000 people, with employment falling by 281,000 people and unemployment falling by 53,000 people. Beyond people losing their jobs, or working reduced or no hours, we continue to see how challenging it is for people without work to remain active within the labour market during lockdowns. This was also reflected in the mutual obligations for jobseekers living in lockdown areas in September."

Hours worked increased by 0.9 per cent in September, a slight recovery from the fall in August (3.7 per cent). This partly reflected the strong recovery in Queensland (5.4 per cent), as conditions there recovered from the lockdown in early August.

Hours worked also increased in New South Wales (2.7 per cent), following two months of large falls (6.5 per cent fall in August, and 7.0 per cent in July). This was underpinned by increases in people working full-time hours, as well as a slight recovery among people who had been working fewer hours than usual in August.

There were large falls in hours worked in Victoria (3.6 per cent) and the Australian Capital Territory (10.5 per cent).

“In the Australian Capital Territory, hours worked fell by 10.5 per cent in September, compared with a 3.2 per cent fall in employment. This highlights the extent to which people had reduced hours or no work through the lockdown, without necessarily losing their jobs. It also shows that hours continue to provide the best indicator of the extent of labour market impacts from lockdowns,” Mr Jarvis said. 

The national underemployment rate dropped by less than 0.1 percentage points to 9.2 per cent in September 2021. There were large increases in the underemployment rates in Victoria (up 0.9 percentage points to 10.0 per cent) and the Australian Capital Territory (up 1.4 percentage points to 8.5 percent), accentuated by increases in underemployment and falls in participation. The underemployment rate remained elevated in New South Wales, at 10.2 per cent.

Today's release includes additional analysis of hours worked, including people working zero hours, and an analysis of employment and hours worked at the state and territory level.

Further information, including regional labour market information, will be available in the upcoming September 2021 issue of Labour Force, Australia, Detailed, due for release on Thursday 21 October 2021.

The ABS would like to thank Australians for their continued support in responding to our surveys during such a difficult time.