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Australia / Spotlight Reports
Economic Update: Unemployment Rate, January 2021

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by Tommy Wu
Jan 26 2021

According to the latest labour force statistics released by the Australian Bureau of Statistics yesterday, unemployment in Australia has fallen to 6.6% in seasonally adjusted terms for the month of December 2020. The data release shows a decline from 6.8% in November, with around 50,000 people gaining employment as the country continues to recover from the COVID-19 pandemic. The recovery has been faster than many had anticipated, despite the scaling back of the JobKeeper program. The youth unemployment rate also fell by 1.7 percentage points to 13.9% during the month. In addition, the number of hours worked increased, with both full-time and part-time employment growing.

The unemployment rate fell in every state and territory, with the exception of South Australia, where it increased by 0.2 percentage points. However, New South Wales also recorded a decline in employed persons. Underemployment, which measures the amount of people that had reduced hours or preferred more hours of work, has fallen to similar levels last recorded prior to the COVID-19 outbreak in March. Australia’s relative success in containing COVID-19, the prospect of a vaccine and the recent retail spike to end 2020 have fuelled the economic recovery, with unemployment continuing to fall from its peak of 7.5% in July 2020. However, the economy will continue to face headwinds in 2021, with support likely to taper off, rising tensions between Australia and China, and domestic border closures following the outbreak in Sydney potentially posing a threat over the coming months.