Unemployment has jumped to a 12-year high of 6.4 per cent, despite the loss of only 300 jobs.
Bureau of Statistics figures show the jobless rate surged from June’s reading of 6 per cent to 6.4 per cent last month – the worst reading since August 2002.
Young people have been particularly hard-hit, with unemployment for 15-24-year-olds hitting 14.1 per cent – the highest level since October 2001.
The jobless rate for the 15-19-year-old subset jumped even more to 20.4 per cent – the highest since April 1997 – and was 30.1 per cent amongst those looking for full-time work.
Overall an estimated 300 jobs were lost, but the jobless rate was also pushed higher by a rise in the proportion of people in work or looking for it.
The so-called participation rate rose from 64.7 to 64.8 per cent, a possible indication that people who had been discouraged from looking for work are now coming back into the jobs market.
Other positive detail in the data was a 14,500-strong rise in full-time employment, while an estimated loss of 14,800 part-time jobs accounted for all of the decline in positions.
Despite the apparent shift to full-time work, the seasonally adjusted July figures show total hours worked fell 0.9 per cent to 1.61 billion.
The Australian dollar has fallen sharply against all major currencies in the wake of the figures.
At 6:00pm AEST the dollar was down close to a cent on the greenback, buying around 92.6 US cents.
Trend figure stayed relatively steady
With monthly volatility prevalent in the data, most economists prefer to focus on the trend, which shows unemployment relatively steady at 6.1 per cent, and 0.4 of a percentage point higher than at this point last year.
JP Morgan economist Ben Jarman says the issue is not job losses, it is a lack of job creation to match a rapidly rising population.
“If you look at the headline numbers, the issue is not that we’re losing jobs en masse, it’s just they’re not moving higher fast enough, given how strong the growth in the working age has been,” he told Reuters.
“Australia has strong population growth, strong inbound migration, and we’re not finding enough jobs to meet that increase in supply of labour as it comes in.”
CommSec’s chief economist Craig James has taken an even more positive view, saying 109,900 new full-time jobs have been added in the first seven months of this year, the best result to start a year since 2008.
“A healthier economy, improved job prospects and, more importantly, a noted lift in job advertisements have resulted in more people searching for work, with an ongoing lift in the participation rate over the last couple of months,” he wrote in a note on the data.
Politicians swap blame over rising jobless total
Both sides of politics are blaming each other for the jobs figures.
Employment Minister Eric Abetz admits the 6.4 per cent unemployment figure is a very high rate, and says he does not know when it will fall.
“As to when unemployment figures will turn around will depend on a host of factors, our task as a Government is not to predict the future,” he said.
“The Senate – and might I add, not the Senate per se, but the Labor-Green majority in the Senate run by Mr Shorten and Senator Milne, has to take a substantial amount of responsibility for the Government not being able to get through its economic agenda and as a result, there is no doubt they have contributed to the high unemployment figure,” he said.
“It is a matter of great regret for every Australian that we have such a figure.”
Mr Abetz also said young Australians need to be less discerning when choosing employment and should consider seasonal work usually reserved for backpackers.
“Well the youth unemployment rate is very concerning because what it means is young people are not getting the sort of start in life that we would want them to have,” he said.
“I stress the issue of backpackers, they are mainly young people, coming to our country, willing to undertake the work, in circumstances where many of our fellow Australians who are young in the youth category are relying on welfare.
“And I simply ask the question, why can’t we translate the young who are on welfare into the jobs that the backpackers are currently undertaking as we speak?”
Opposition employment spokesman Brendan O’Connor says the figure should set off alarm bells in Government.
“More jobs lost than gained over the month, an unemployment rate higher than for a dozen years – I think it is concerning,” he said.
Senator Abetz has blamed Labor and the Greens in the Senate for the Government not getting its economic program through. Labor says the blame lies with the Government.