Unemployment down sharply to 11.9% in November as lockdown finally ends in Victoria – lowest since early March

Latest Roy Morgan employment series data shows 1.68 million (down 130,000) Australians unemployed (down 0.9% to 11.9% of the workforce).

• The workforce was down slightly in November but employment increased strongly:
  The workforce in November was 14,119,000 – comprised of 12,439,000 employed Australians and 1,680,000 unemployed Australians looking for work. The workforce was down by 39,000 as some people who were unemployed left the workforce but there was also strong employment growth during the month.
• More Australians were employed in November as full-time employment was up strongly:
  12,439,000 Australians were employed, up 91,000 from October – driven by increases in both Victoria (up 85,000) and NSW (up 74,000) while other States declined. There was an increase in full-time employment up 138,000 to 8,098,000, while there were 4,341,000 employed part-time, down 47,000.
• Unemployment dropped in November as new jobs were created and some left the workforce:
  1,680,000 Australians were looking for work (11.9% of the workforce), down 130,000 from October. There were fewer people looking for full-time work, down 11,000 to 779,000 and also far fewer looking for part-time work, down a large 119,000 to 901,000.

Roy Morgan’s unemployment figure of 11.9% for November is significantly higher than the current ABS estimate for October 2020 of 7%. However, the ABS figure for October estimated a decline in the workforce participation rate to 65.8% since March which if it had held steady at 66% (Roy Morgan’s participation rate is at 66.9% in November, down slightly from 67% in March) would mean an extra 60,000 people in the workforce now. The ABS also counts an additional 134,000 Australians who were working zero hours in October for economic reasons as ‘employed’. If all of these non-workers are added back the ABS unemployment estimate for October increases to 1.16 million (8.4%).

• Under-employment also down in November to lowest since early March:
  In addition to those who were unemployed 1.28 million Australians (9.1% of the workforce) were under-employed – working part-time but looking for more work. This was a decline of 53,000 on a month ago driven by the decrease in part time employment as more full-time jobs were filled.

In total 2.96 million Australians (21.0%) were either unemployed or under-employed in November, an improvement of 183,000 on October according to the latest Roy Morgan employment estimates.

Compared to early March, before the nation-wide lockdown was implemented, there were 800,000 more Australians either unemployed or under-employed (+5.4% points) in November.

Michele Levine, CEO Roy Morgan, says the unemployment and under-employment results for November show an economy in recovery mode:

“Roy Morgan’s unemployment measure for November shows 1.68 million Australians were unemployed (11.9% of the workforce) and an additional 1.28 million (9.1%) were under-employed. Importantly, this is the first time since the COVID-19 pandemic began that both measures have dropped month-on-month as Victoria finally emerged from a four-month lockdown in late October.

“In total, 2.96 million Australians (21.0%) were unemployed or under-employed in November – down 183,000 on a month ago and the lowest level since early March in the pre-pandemic period.

“However, despite this recovery, there is a long way to go with more than 800,000 Australians now unemployed or under-employed than there were pre-pandemic and economic stimuli to the economy being progressively withdrawn.”

Roy Morgan Unemployment & Under-employment (2019-2020)

Source: Roy Morgan Single Source January 2019 – November 2020. Average monthly interviews 4,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

Unemployment down sharply in Victoria after the end of the four month lockdown

A look at the trends on a State-based level shows unemployment dropping sharply in Victoria, by 3% to 11.6% in November, after the four-month lockdown finally ended in late October. The decline in unemployment was driven both by new jobs being created and also some unemployed people leaving the workforce.

Overall, the Victorian workforce was down 37,000 to 3,784,000 in November, but new job creation had a far bigger impact on driving unemployment down. Employment in Victoria increased 85,000 to 3,346,000 driven by an increase in full-time jobs of 89,000 to 2,178,000, but part-time employment was down slightly by 4,000 to 1,168,000.

On raw numbers unemployment in Victoria was down 122,000 to 438,000 and under-employment dropped 116,000 to 322,000. In November a total of 760,000 Victorians were either unemployed or under-employed (20.1%) – the lowest monthly figure since March 2020.

Also performing well was NSW for which unemployment declined 0.5% to 10.4% - and was again clearly the lowest unemployment rate of any State. The workforce in NSW increased 57,000 to 4,463,000 in November but the jump in employment, up 74,000 to 3,999,000, was larger and led to the drop in unemployment.

The broader labour market is being heavily impacted by the changes in JobKeeper eligibility over the last two months. The first tranche of JobKeeper until the end of September was supporting more than 3.6 million workers, however, after a re-test of eligibility for the JobKeeper extension, there are now around 1.5 million eligible workers for the period after September. This represents a decline of more than 2 million workers with Victoria comprising the lion’s share of the 1.5 million workers still receiving the JobKeeper wage subsidy.

The tightening of JobKeeper eligibility has been most keenly felt in the other States which now have higher unemployment rates than either Victoria or NSW. Unemployment in Queensland increased to 14% in November and increased to 14.7% in SA while it was again above the national average at 12.2% in WA.

Michele Levine, CEO Roy Morgan, says the decline in unemployment has been driven by a re-opened Victorian economy with monthly jobs growth concentrated in Victoria and NSW while smaller States have seen a decline in employment as Government support is reduced:

“The biggest impact on overall employment and unemployment in November was the re-opening of Victoria as the four-month long lockdown finally ended late in October. The re-opened Victorian economy saw strong jobs growth (up 85,000) and a big decline in both unemployment (down 122,000) and under-employment (down 116,000) as people were allowed to go back to work.

“The unemployment rate in Victoria dropped by 3% to 11.6% in November and is now below the national average and above only NSW on 10.4% (down 0.5%). The two largest States have traditionally enjoyed lower unemployment rates than their smaller counterparts and it appears this trend is set to reassert itself in a post COVID-19 environment.

“Unemployment in Western Australian was at 12.2% in November and was even higher in Queensland (14%) and South Australia (14.7%). However, there is good news on this front with tourism-reliant Queensland re-opening to both Victoria and residents of Sydney this week and Western Australia set to re-open to both NSW and Victoria next week. However, the latest outbreak in Adelaide has seen most States (except NSW) close their borders to South Australia for the time being.

“Treasurer Josh Frydenberg announced this week that the JobKeeper wage subsidy scheme will come in significantly under-budget with a large fall in the number of eligible businesses receiving the wage subsidy after the initial period expired at the end of September.

“There were 3.6 million workers receiving JobKeeper from March until September and this has now dropped to only 1.5 million workers post-September, significantly lower than an initial Treasury estimate of 2.2 million workers. At that time Treasury also estimated 60% of JobKeeper workers during the December quarter would be in Victoria – equivalent to over 1.3 million Victorian workers.

“The ending of the second Victorian lockdown after the re-testing of JobKeeper eligibility now means Victorian-based businesses are set to be the biggest beneficiaries of the JobKeeper extension during the December quarter as many businesses in other States are no longer eligible for the payment.

“Today’s results showing a plunge in Victorian unemployment in November while other States struggled to create employment growth shows there are significant hurdles for the economy to overcome as Government stimulus continues to be withdrawn from the economy. The increasingly contentious relationship with Australia’s largest trading partner China also has the potential to cause significant economic shocks during the next few months.”

Roy Morgan Unemployed and ‘Under-employed’* Estimates

*Workforce includes those employed and those looking for work – the unemployed.

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 720,129 Australians aged 14 and over between January 2007 and November 2020 and includes 6,082 telephone and online interviews in November 2020. *The ‘under-employed’ are those people who are in part-time work or freelancers who are looking for more work.

Roy Morgan Research cf. ABS Unemployment Estimates

Source: Roy Morgan Single Source January 2019 – November 2020. Average monthly interviews 4,000.Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

Source: Roy Morgan Single Source January 2000 – November 2020. Average monthly interviews 4,000.Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

Source: Roy Morgan Single Source April 1995 – November 2020. Average monthly interviews 4,000.Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

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