Australian unemployment jumps to 10.7% in January – highest since JobKeeper ended in March 2021

In January unemployment increased 1.4% points to 10.7%, according to the latest Roy Morgan employment series data. Unemployment increased due to two factors, part-time employment decreasing after the Christmas retailing season along with more people joining the workforce to look for both part-time and full-time work.

Unemployment in January increased 223,000 to 1.61 million Australians (10.7% of the workforce) and under-employment was up by 65,000 to 1.43 million (9.5% of the workforce). Overall unemployment and under-employment was up a large 288,000 to 3.03 million (20.2% of the workforce).

• Employment dropped in January driven by a decrease in part-time employment:

Australian employment decreased by 150,000 to 13,418,000 in January. The decrease was driven by a drop in part-time employment, down 280,000 to 4,517,000, while full-time employment increased, up by 130,000 to 8,901,000. The movements in both full-time and part-time employment were in line with the normal seasonal trends seen at this time of year following the Christmas retailing season.

• Unemployment was up in January with more people looking for both full-time and part-time work:

1,607,000 Australians were unemployed (10.7% of the workforce) in January, an increase of 223,000 from December with more people looking for full-time work, up 49,000 to 644,000 and more people looking for part-time work, up 174,000 to 963,000 – both at their highest since March 2021.

• The workforce increased to a record high of over 15 million in January:

The workforce in January was 15,025,000 (up 73,000 from December) – comprised of 13,418,000 employed Australians (down 150,000) and 1,607,000 unemployed Australians looking for work (up 223,000).

• Overall unemployment and under-employment above 3 million for first time in two years:

In addition to the unemployed, 1.43 million Australians (9.5% of the workforce, up 0.4% points) were under-employed – working part-time but looking for more work, up 65,000 from December.

In total 3.03 million Australians (20.2% of the workforce) were either unemployed or under-employed in January, up a large 288,000 on December. This is the highest level of combined unemployment and under-employment for two years since February 2021 (3,068,000, 21.0% of the workforce).

Compared to early March 2020, before the nation-wide lockdown, in January 2023 there were more than 850,000 more Australians either unemployed or under-employed (+4.6% points) even though overall employment (13,418,000) is over 500,000 higher than it was pre-COVID-19 (12,872,000).

Roy Morgan’s under-employment figure of 9.5% is over 3% points higher than the ABS estimate of 6.1% for December. However, the ABS figures for December show there were 807,400 workers who worked fewer hours than usual (or zero hours) due to illness, personal injury or sick leave compared to an average of 541,240 for the month of December over the five years from December 2017 – December 2021.

This difference in the numbers of people who worked fewer hours (or zero hours) due to illness, personal injury or sick leave, which can be put down to the highly infectious Omicron variant of COVID-19, equates to a difference of 266,160 in December 2022 above the average for the month of December for the previous five years. If these workers are added to the approximately 876,100 workers, the ABS classifies as under-employed this creates a total of 1,142,260 – equivalent to 8.0% of the workforce.

When the ABS unemployed (3.5% of the workforce, 499,800 workers) and this larger than usual level of under-employed (8.0% of the workforce, approximately 1,142,260 workers) are combined these figures add to 1.64 million workers, around 11.5% of the workforce – just over half of the comparable Roy Morgan figure.

Roy Morgan Unemployment & Under-employment (2019-2023)

Source: Roy Morgan Single Source January 2019 – January 2023. Average monthly interviews 5,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

Michele Levine, CEO Roy Morgan, says the ending of pandemic related restrictions in October 2022 has seen the return of seasonal factors to the Australian employment markets in recent months including the usual movements in full-time and part-time employment in January:

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 interviews of 882,433 Australians aged 14 and over between January 2007 and January 2023 and includes 5,977 telephone and online interviews in January 2023. *The ‘under-employed’ are those people who are in part-time work or freelancers who are looking for more work.

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Roy Morgan Research cf. ABS Unemployment Estimates

Source: Roy Morgan Single Source October 2006 – January 2023. Average monthly interviews 4,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

Roy Morgan Research cf. ABS Unemployment Estimates

Source: Roy Morgan Single Source January 2000 – January 2023. 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 – January 2023. Average monthly interviews 4,000.
Note: Roy Morgan unemployment estimates are actual data while the ABS estimates are seasonally adjusted.

ROY MORGAN MEASURES REAL UNEMPLOYMENT IN AUSTRALIA
NOT THE ‘PERCEPTION’ OF UNEMPLOYMENT – JUNE 8, 2012

The Roy Morgan Unemployment estimate is obtained by surveying an Australia-wide cross section of people aged 14+. A person is classified as unemployed if they are looking for work, no matter when. The results are not seasonally adjusted and provide an accurate measure of monthly unemployment estimates in Australia.

Households selected for the ABS Survey are interviewed each month for eight months, with one-eighth of the sample being replaced each month. The first interview is conducted face-to-face. Subsequent interviews are then conducted by telephone.

The ABS classifies a person as unemployed if, when surveyed, they have been actively looking for work in the four weeks up to the end of the reference week and if they were available for work in the reference week.

The ABS classifies a person as employed if, when surveyed, a person worked for one hour or more during the reference week for pay, profit, commission or payment in kind, or even if a person worked for one hour or more without pay in a family business or on a farm.

The Australian Bureau of Statistics Unemployment estimates are also seasonally adjusted.

For these reasons the Australian Bureau of Statistics Unemployment estimates are different from the Roy Morgan Unemployment estimate. Gary Morgan's concerns regarding the ABS Unemployment estimate is clearly outlined in a 2012 letter to the Australian Financial Review, which was not published.

http://www.roymorgan.com/~/media/Files/Papers/2012/20120603.pdf