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Australia: Employment Surges as Economy Opens in 2021

February Labour Force Survey. Total employment: 88.7k from 29.5k, unemployment rate: 5.8% from 6.3%, participation rate: 66.1% from 66.1%.

February was cracking result with total employment rising 88.7k which were all full-time. Part-time employment was as good as flat (-0.5k).

With a flat participation rate of 66.1% the unemployment rate fell to 5.8% from 6.3%.

Unemployment is 0.6ppt higher than it was in March (pre COVID lockdowns) and with employment up 3.6k (0.0%) on March, this higher rate of unemployment is explained by the 0.2ppt higher participation rate.

By gender male participation is up 0.2ppt while female participation is up 0.3ppt.

Female unemployment rate fell 0.7ppt to 5.5% while male unemployment fell 0.4ppt to 6.1%.

There was the strong recovery in hours worked, +6.1%mth, from the -4.9% collapse in January, for hours worked to now be up 0.2% in the year. Total employment is up 0.1%yr to February.

As expected, NSW had a recovery from the January closures (+42.0k) with Victoria continuing the robust momentum from the reopening of its economy in late 2020 (+26.6k).

But there were some signs that at the more micro level there are some issues at hand in the labour market as we head into the ending of the JobKeeper programme.

Underemployment lifted to 8.5% from 8.2% which can’t be explained by a rise in part-time employment due to the strong growth in full-time employment.

Those working zero hours for economic reasons, seasonally adjusted by Westpac, lifted from 82.1k in January to 106.7k in February.

Nevertheless, it would be dangerous to overstate those more micro risks (mico as they will appear in distinct sectors, regions and occupations) for job losses given the strength of the recovery.

So far this year there has been a distinct shift in employment towards full-time employment. Up to January the majority of the recovery in employment was part-time, since then we have seen a market shift with full-time employment lifting 147.8k (1.7%) since December while part-time employment is down -29k (-0.7%). Since March full-time employment is up 18.3k/0.2% while part-time employment is down -14.7k/-0.4%.

Westpac Banking Corporation
Past performance is not a reliable indicator of future performance. The forecasts given above are predictive in character. Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based are reasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks and uncertainties. The results ultimately achieved may differ substantially from these forecasts.

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