Unemployment rate drops to 4.0 percent

Woman and man shaking hands. | Newsreel
The national unemployment rate fell to 4.0 percent in May. | Photo: Sturti (iStock)

Thousands of Australians returned to work in May as the national unemployment rate fell to 4.0 percent.

The latest Australian Bureau of Statistics (ABS) data show that the seasonally-adjusted unemployment rate fell by 0.1 percentage points last month.

ABS Head of Labour Statistics Bjorn Jarvis said employment rose by around 40,000 people, with the number of unemployed falling by 9000 in the month.

“In April we saw more unemployed people than usual waiting to start work. Some of the fall in unemployment and rise in employment in May reflects these people starting or returning to their jobs,” Mr Jarvis said.

“While the total number of unemployed people fell by 9000 in May, this followed a 33,000 increase in April.”

Mr Jarvis said unemployment was around 24,000 people more than in March, an average increase of around 12,000 people each month.

“There are now almost 600,000 unemployed people, however, that is still nearly 110,000 fewer people than in March 2020, just before the pandemic.”

He said as a result of the increase in employment and the fall in unemployment, the seasonally-adjusted employment-to-population ratio remained at 64.1 percent and the participation rate remained at 66.8 percent.

“The employment-to-population ratio and participation rate both continue to be much higher than their pre-pandemic levels. Together with elevated levels of job vacancies, this suggests the labour market remains relatively tight, though less than in late 2022 and early 2023,” Mr Jarvis said.

He said the seasonally adjusted underemployment rate remained steady at 6.7 percent in May.

“While the underemployment rate has risen by 0.3 percentage points since May 2023, it remained 2.0 percentage points lower than March 2020.”

The underutilisation rate, which combines the unemployment and underemployment rates, also remained steady at 10.7 per cent.