Unemployment rate holds steady in December

The unemployment rate held steady at 3.9% in December, in seasonally adjusted terms, despite a decline of 65,000 in employment and a modest fall of 1,000 in the number of unemployed individuals, according to the latest ABS data.

“The fall in employment in December followed larger-than-usual employment growth in October and November, a combined increase of 117,000 people, with the employment-to-population ratio and participation rate both at record highs in November,” said David Taylor, ABS head of labour statistics.

However, the December figures reflected a correction after the surge. The seasonally adjusted participation rate dropped 0.4 percentage points to 66.8%, returning to levels seen in September, while the employment-to-population ratio slid to 64.2%, the lowest since May 2022 but still 1.9 percentage points higher than March 2020.

“The strength in employment in October and November and the fall in December, reflected changes in the timing of employment growth in the last few months of 2023, compared with earlier years,” Taylor said in a media release.

“While the December employment fall was large, the number of employed people was still 52,000 higher than September. Looking over the past twelve months, seasonally adjusted employment increased by an average of 32,000 people per month, showing reasonably strong underlying growth during 2023.”

Click here to read about the October and November results.

Both unemployment and underemployment rates stayed at relatively low levels, while the participation rate and employment-to-population ratio remained high, indicating a persistently tight labour market, Taylor said.

Key metrics and trends

• Employment and hours worked both declined by 0.5% in December
• Annual growth in hours worked slowed to 1.2%, well below the annual employment growth of 2.8%
• Underemployment rate remained at 6.5%, 2.2 percentage points lower than March 2020
• Underutilisation rate (combining unemployment and underemployment) remained at 10.4%, 3.5 percentage points lower than before the COVID-19 pandemic

Underlying trend data

• In December, the trend unemployment rate remained at 3.8%
• Trend employment increased by approximately 19,000 people (0.1%), while hours worked fell by 0.2%
• The employment-to-population ratio decreased by 0.1 percentage point to 64.4%, and the participation rate remained at 67.0%
• Underemployment rate and underutilisation rate remained at 6.5% and 10.3%, respectively, in line with November’s figures

Taylor said trend indicators still point to a tight labour market, but the rising unemployment rate since November 2022 and a slowdown in employment and hours worked suggest a potential easing of the labour market.

For additional information, read Labour Force, Australia, December 2023.

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