Unemployment rate reverses September decline: ABS

In seasonally adjusted terms, the number of unemployed people increased by 0.7 per cent in October, up by 3,600, while the number of employed people rose by 0.4 per cent, up by 55,000.

ABS head of labour statistics Bjorn Jarvis said: “With employment increasing by 55,000 people, and the number of unemployed people increasing by 28,000, the unemployment rate rose to 3.7 per cent in October.

“This was back to around where it had been in July and August. The large increase in employment in October followed a small increase in September of around 8,000 people.

“Looking over the past two months, these increases equate to average employment growth of around 31,000 people a month, which is slightly lower than the average growth of 35,000 people a month since October 2022.”

Commonwealth Bank of Australia economist Stephen Wu said the tick up in unemployment was in line with the major bank’s and market estimates.

“It follows the temporary dip to 3.6 per cent in September and is unchanged from the unemployment rate figure in July and August,” Mr Wu said.

“However, the unemployment rate remains much lower than implied by its historical relationships with other labour market indicators such as surveyed measures of unemployment expectations and job ads.”

ANZ senior economist Blair Chapman said the Reserve Bank of Australia (RBA) will likely “look through the strength in today’s (16 November) employment numbers, which were driven by a part-time increase of 37,900”.

“The youth unemployment rate, which the RBA has been pointing to as one of the indicators they use to assess labour market spare capacity, increased to 9.2 per cent in October, its highest level since December 2021,” Mr Chapman said.

“There is no change to our RBA view off the back of these data, we see the cash rate on hold at 4.35 per cent.”

Record WPI

Preceding the Labour Force data, the ABS revealed that the latest Wage Price Index (WPI) rose by 1.3 per cent in seasonally adjusted terms in the September quarter 2023 and 4 per cent over the year, marking the highest quarterly rise in the entire 26-year history of the WPI.

However, according to ANZ senior economist Catherine Birch, this record rise in wage growth is a “one-off” and won’t worry the Reserve Bank of Australia (RBA).

“While annual WPI growth came in a touch higher than consensus and the RBA’s forecast, this was due to an upward revision in Q2 quarterly growth and Q3 quarterly growth printed in line with expectations,” Ms Birch said.

“We don’t expect today’s data will change the RBA’s thinking ahead of its December meeting, where we expect the RBA to hold the cash rate at 4.35 per cent.”

[RELATED: Record WPI unlikely to force RBA to hike: ANZ]