In a trend that continues on from October labour force data, the unemployment rate rose by 0.1 per cent to 3.9 per cent on a seasonally adjusted basis, despite a good increase in the overall number of employed people by 61,500. Both the number of employed and unemployed people continue to rise, which is a result of an increase in the participation rate and strong population growth through record high migration.
Over the year to November 2023, the number of employed people has risen by 3.2 per cent, however, the percentage increase in unemployed people is 16.5 per cent over the same time period. And despite the large increase in the number of employed people over the year (441,500) there has only been a 1.6 per cent increase in the number of hours worked. This all suggests that conditions in the labour market are continuing to soften, albeit slowly.
Recent business confidence measures, forward orders, and CreditorWatch data showing large falls in the average value of invoices all point to continued softening in the labour force in the first half of 2024. There is a good chance we will see an acceleration in the pace of unemployment increases, particularly as lower income consumers burn through the last of their cash reserves this Christmas and over the holiday period. Rising insolvencies through 2024, particularly as the ATO works towards collecting significant tax debts from businesses, will also contribute to rising unemployment in 2024.
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