May unemployment up slightly to 9.5%, but under-employment down to 7.8%

In May 2013 an estimated 1.17 million Australians (9.5% of the workforce) were unemployed. This is up 0.2% from last month.

The Australian workforce* was 12,328,000 (down 109,000) comprising 7,597,000 full-time workers (up 124,000), 3,563,000 part-time workers (down 247,000) and 1,168,000 looking for work (up 14,000) according to the Roy Morgan monthly employment estimates. These figures exclude people who have dropped out of the workforce and given up looking.

Of the employed a further 961,000 Australians (7.8% of the workforce*) were under-employed - working part-time and looking for more work, 139,000 less than a month ago (down 1%). As part-time employment falls due to people leaving the workforce or gaining full-time jobs, under-employment also falls.

The fall in part-time employment this month (in May) was expected as the April employment estimates are usually higher because of the impact of the Easter retailing period – in ten out of the last thirteen years part-time employment has increased in April.

In May an estimated 2.129 million Australians (17.3% of the workforce, down 0.8% from April) were unemployed or under-employed (125,000 less than last month), however this is almost the same (up 25,000, 0.1%) as 12 months in May 2012.

In May an estimated 629,000 Australians (up 121,000) were looking for full-time work, while 539,000 (down 107,000) are now looking for part-time work.

The latest Roy Morgan unemployment estimate of 9.5% is still a substantial 4% more than currently quoted by the ABS for April 2013 (5.5%).

*Workforce includes those employed and those looking for work – the unemployed. # The Gillard Government’s ‘Fair Work Australia’ Act was implemented on January 1, 2010, replacing the Howard Government’s ‘Work Choices’ Legislation.

Gary Morgan says:

“Today’s Roy Morgan May employment estimates show Australian unemployment rising slightly by 14,000 to 1,168,000 (9.5%, up 0.2%) while under-employment has dropped substantially by 139,000 to 961,000 (7.8%, down 1%). This means a total of 2.129 million (down 125,000) Australians (17.3%, down 0.8%) are either unemployed or under-employed – the lowest for more than six months since September 2012.

“Although fewer Australians were either unemployed or under-employed, overall employment in May fell 123,000 to 11,160,000 driven by a drop in part-time employment to 3,563,000 (down 247,000) – the lowest part-time employment since October 2012 (3,533,000). This was partially offset by the rise in full-time employment to 7,597,000 (up 124,000).

“It must be noted that the April employment estimates were impacted by the Easter retailing period, which boosts part-time employment temporarily, and the May employment figures are more consistent with the employment trends seen throughout 2013.

“Over a longer timescale, today’s employment estimates show May 2013 unemployment at 9.5% (up 1.3% since May 2012). Overall employment has also fallen slightly, dropping 56,000 over the last 12 months. The same trend of more full-time work and less part-time work has also been evident over the last 12 months with 240,000 more Australians working full-time than a year ago but 296,000 fewer Australians now working part-time than a year ago.

“Yesterday’s poor Australian GDP number – which showed Australia grew by only 0.6% in the March Quarter 2013 for an annual growth rate of 2.5% - the lowest annual growth rate since September Quarter 2011 shows that the Australian economy is clearly slowing and in need of further stimulus as the mining boom slows down. Unfortunately, the implausibly low ABS figures – showing Australian unemployment at 5.5% in April do have a real impact on the average Australian by influencing policy decisions of the Government and the RBA.

“This week’s decision by the RBA to leave interest rates unchanged at 2.75% – which came before Australia’s latest GDP figures were released – is a real world example of a policy decision impacted by the low ABS unemployment numbers and not the reality of the Australian labour market. The Roy Morgan May employment estimates show 2.129 million Australians (17.3%) are either unemployed or under-employed, and the Australian economy needs further stimulus, not less, to ensure these people have the best chance of gainful employment.”

This Roy Morgan survey on Australia’s unemployment and ‘under-employed’* is based on weekly face-to-face interviews of 331,567 Australians aged 14 and over between January 2007 – May 2013 and includes 3,964 face-to-face interviews in May 2013.

*The ‘under-employed’ are those people who are in part-time work or consultants who are looking for more work. (Unfortunately the ABS does not measure this figure in their monthly unemployment survey.)

For further information:

Unemployment Data Tables

Roy Morgan Research Employment Estimates (2001-2013)

Roy Morgan Research Unemployment & Under-employment Estimates (2007-2013)

Roy Morgan Research vs ABS Employment Estimates (1992-2013)

ABS Employment Estimates (1992-2013)

ROY MORGAN MEASURES REAL UNEMPLOYMENT IN AUSTRALIA

The Roy Morgan Unemployment estimate is obtained by surveying an Australia-wide cross section by face-to-face interviews. A person is classified as unemployed if they are looking for work, no matter when.

The results are not seasonally adjusted and provide an accurate measure of monthly unemployment estimates in Australia.

The Australian Bureau of Statistics Unemployment estimates are obtained by mostly telephone interviews. Households selected for the ABS Survey are interviewed each month for eight months, with one-eighth of the sample being replaced each month. The first interview is conducted face-to-face. Subsequent interviews are then conducted by telephone.

The ABS classifies a person as unemployed if, when surveyed, they have been actively looking for work in the four weeks up to the end of the reference week and if they were available for work in the reference week.

The Australian Bureau of Statistics Unemployment estimates are also seasonally adjusted.

For these reasons the Australian Bureau of Statistics Unemployment estimates are different from the Roy Morgan Unemployment estimate. Gary Morgan's concerns regarding the ABS Unemployment estimate is clearly outlined in his letter to the Australian Financial Review, which was not published.