While the August 2023 unemployment rate remained steady at 3.7% on a seasonally adjusted basis, there was a strong gain in employed people overall, at 64,900, or a 0.5 percentage point increase.

The very minor increase in the participation rate from 66.9% to 67.0% was the reason this jobs growth wasn’t enough to lower the unemployment rate again.

While this is good news for the economy overall, coupled with still very subdued consumer confidence, it is unlikely to be enough to warrant an increase to the cash rate after the October meeting.

Underemployment continued to rise in August, from 6.4% in July to 6.6%, meaning a larger proportion of workers are looking for more hours. And despite the surge in employment over August, monthly hours worked in all jobs actually declined by nine million hours, or 0.5% on a monthly basis.

While overall this is positive news for the Australian economy, our August Business Risk Index data tells us that business activity, particularly among small businesses, continues to slow down.

The average value of B2B invoices is down over 30% year-on-year and has been trending down for over a year now. We expect that hours worked and underemployment will continue to rise in line with current trends.