{"id":30249,"date":"2025-07-23T03:14:23","date_gmt":"2025-07-23T03:14:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/30249\/"},"modified":"2025-07-23T03:14:23","modified_gmt":"2025-07-23T03:14:23","slug":"why-a-surprise-jump-in-unemployment-isnt-as-bad-as-it-sounds","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/30249\/","title":{"rendered":"Why a surprise jump in unemployment isn\u2019t as bad as it sounds"},"content":{"rendered":"

New figures show Australia\u2019s seasonally adjusted unemployment rate unexpectedly rose to 4.3%<\/a> \u2013 its highest level since late 2021 \u2013 in June this year, up from 4.1% in May.<\/p>\n

While this is bad news, it\u2019s not as bad as it might seem. Higher unemployment came from more people looking for work. In the long run, that\u2019s good for the economy. <\/p>\n

And these figures also make it more likely we\u2019ll see an interest rate cut next month \u2013 which is now looking overdue.<\/p>\n<\/p>\n

What\u2019s the bad news?<\/p>\n

This is the second month in a row we\u2019ve seen no growth in total employment, while total hours worked (the number of hours worked by employed individuals, regardless of whether they are full-time, part-time or overtime) in the past month has gone backwards.<\/p>\n

All this adds to the picture of a slowing labour market since the start of the year, after surprisingly strong growth in the second half of 2024. <\/p>\n

The latest Australian Bureau of Statistics release also includes data on where extra hours worked during 2025 have come from. <\/p>\n

Employment growth has come entirely from the \u201cnon-market sector<\/a>\u201d \u2013 which is healthcare and social assistance, education and training, and public administration and safety. And the big driver of those extra jobs has been in social assistance and health care, which is largely government-funded.<\/p>\n

That means employment has gone backwards in the rest of the economy, adding to a picture of a jobs market being propped up by government investment in the caring economy.<\/p>\n

Why it\u2019s not as bad as you might think<\/p>\n

The reason unemployment rose is that more people were looking for work \u2013 so it\u2019s not because employment fell. <\/p>\n

Of course, we\u2019d prefer those people to have found jobs. But it does mean people weren\u2019t losing jobs for the unemployment rate to rise.<\/p>\n

The growth in labour force participation in June continues the trend of strong growth since late 2021. In the long run, that\u2019s a good thing \u2013 it means the country can produce more output, and more people gain an income from work.<\/p>\n

An interest rate cut now looks more certain<\/p>\n

Last week, the Reserve Bank surprised most people by keeping the cash rate on hold at 3.85%<\/a>.<\/p>\n

Today\u2019s unemployment data is extra evidence that the labour market isn\u2019t contributing to inflation pressure \u2013 in fact, it\u2019s the opposite. <\/p>\n

It shows an interest rate cut is now overdue. The Reserve Bank board meets again in mid-August, with a decision on rates announced on August 12.<\/p>\n

When will we know if this is a blip or a trend?<\/p>\n

One possibility is that some of the extra people who became unemployed in June have a job to go to in the next month. Ups and downs in that group have at times been influential in driving unemployment numbers in recent times. <\/p>\n

In that case, this month\u2019s figures may partly turn out to be a blip. We\u2019ll be able to tell that when we see next month\u2019s figures. <\/p>\n

But the blip is unlikely to explain all of the rise in June. This is also about a labour market that is slowing.<\/p>\n","protected":false},"excerpt":{"rendered":"New figures show Australia\u2019s seasonally adjusted unemployment rate unexpectedly rose to 4.3% \u2013 its highest level since late…\n","protected":false},"author":2,"featured_media":30250,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[28,134],"class_list":{"0":"post-30249","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-jobs","8":"tag-business","9":"tag-jobs"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/30249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=30249"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/30249\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/30250"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=30249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=30249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=30249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}