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Australian unemployment drops sharply

Business Insider Australia logo Business Insider Australia 14/06/2018 David Scutt

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Australia's unemployment rate tumbled in May as workers left the labour market.

According to the Australian Bureau of Statistics (ABS), employment rose by 12,000 in seasonally adjusted terms, missing forecasts for an increase of 19,000.

April's jobs increase -- originally reported as a gain of 22,600 -- was revised down to 18,400.

At 12.5183 million, employment now stands at the highest level on record.

Continuing the recent pattern, the split between full and part-time employment growth was the exact opposite to a month earlier.

Full-time employment decreased 20,600 to 8,521,400 while part-time employment increased 32,600 to 3,996,900.

Reflecting those trends, the ABS said that total hours worked fell by a large 24.2 million hours, or 1.4%, to 1.7388 billion hours, reversing the strength seen in April.

By state and territory, the largest increase in employment was in Victoria at 22,100, followed by Queensland and New South Wales at 5,000 and 2,800 respectively.

The largest decline was seen in Western Australia where employment fell by 1,900.

Over the past year, full-time employment increased by 178,800, slightly faster than the 125,100 lift in part-time employment over the same period. Combined, total employment increased by 303,900, continuing to slow from the levels seen throughout much of 2017.

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Despite the monthly employment miss, the unemployment rate fell to 5.4%, down from 5.6% in April.

Markets had been expecting an unchanged reading.

The decline in the unemployment rate reflected a decline in labour force participation which fell from an upwardly-revised 65.7% to 65.5%. The size of Australia's labour force -- measuring those people in employment or activity looking for work -- fell by 14,800 workers to 13.233 million.

The small increase in employment and decline in labour force participation saw the number of unemployed workers fall by 26,800 to 714,600.

Australia's labour force underemployment rate -- measuring those workers with a job but who would like to work more hours -- increased by 0.1 percentage points to 8.5%.

Combined with the unemployed workers, that left Australia's underutilisation rate steady at 13.9%.

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