Scott Morrison has declared the Australian economy is “fighting back” after new labour force data confirmed close to a million Australians were unemployed in June.
Unemployment rose in June to 7.4%, up from 7.1% in May, as the shock caused by coronavirus pandemic continued to reverberate through the Australian economy.
While conditions remain grim, with 992,300 Australians out of work, and the unemployment rate 2.2% higher than it was at this time last year, there are signs of recovery in the labour market.
Total employment increased by 210,800 in the month and the participation rate also increased as the economy slowly moved out of lockdowns imposed to flatten the curve of Covid-19 infections. Part-time employment increased by 249,000 month-to-month and underemployment fell by 1.4%.
But full-time employment fell by 38,100. The Australian Bureau of Statistics says compared with 12 months ago, there are now 306,800 fewer people employed full time and 215,500 fewer people employed part time.
Morrison noted on Thursday the second wave of infections in Victoria would likely set back the fledgling economic recovery. Just before the ABS reported the jobs number, the state recorded 317 new cases and two fatalities – a new daily record – and Melbourne has gone into a second lockdown.
Morrison characterised developments in Victoria as a substantial setback – “beyond what we hoped would have occurred” – and he said that would have implications.
“In July, I expect we will see impact [in the labour force data] from Victoria, but what it has demonstrated in June is that Australia has opened up again as people have gone back into their businesses and opened their doors.”
He said New South Wales was faring better than Victoria and the contact tracing in the state was containing the outbreak that started at the Crossroads hotel. He said the effectiveness of the response indicated it was possible to reopen the economy and “live alongside the virus”.
Morrison has doubled down in recent days on suppression being the appropriate strategy rather than harder lockdowns in an attempt to eliminate the virus, and he continued that line on Thursday.
“You don’t protect your economy by continually shutting things down,” he said. “That’s what you have to do when things get to the point they have in Victoria.”
Morrison said it was impossible to predict the future, but he urged Australians to be confident.
“We are very determined to look ahead and I would say to Australians, as difficult as these times are, let’s not look down, let’s look up, let’s lift our heads. Today’s employment figures shows there is hope. It shows we have done it before and we can do it again”.
The prime minister said the income support deployed by the government during the pandemic had helped contain the wreckage in the labour market and that support would continue to be necessary.
Pointing to the looming economic statement next Thursday, which will be accompanied by an adjudication on the future of the jobseeker and jobkeeper payments, Morrison said future income support would be “targeted and demand-driven and go to those most in need”.
The ABS said its measure of hours worked fell by 9.5% between March and April, as social distancing restrictions came into force, but then the trend stabilised in May and began to recover between May and June, when the metric increased by 4%, alongside a 1.7% increase in employment.
It says just over a million people worked fewer than their usual hours for economic reasons in June, which was an improvement on May, when the number was 1.55 million, and April, when the number was 1.8 million people.
Of the million employed Australians who worked fewer than their usual hours in June for economic reasons, around 230,000 worked no hours at all and around 920,000 people worked some hours, but fewer hours than they usually work.
Morrison said his message to young Australians trying to find work in a difficult labour market was “look forward, not back”.
“The problem in the past has been that it’s looking too much in the rear-vision mirror rather than through the front windscreen. As we come out of this crisis and work through the Covid-19 recession, we must keep looking forward.”
