Many businesses are reporting difficulties in recruiting qualified staff.(ABC News: John Gunn)
Australia's official unemployment rate has dropped to 3.5 per cent, with an estimated 88,400 jobs added to the economy last month.
This is a steep fall from the 3.9 per cent unemployment rate seen for the previous three months, andsets a fresh record low jobless rate sincethe Australian Bureau of Statistics (ABS) jobs numbers became monthly in 1978.
This is the lowest unemployment rate since August 1974, when it was 2.7 per cent and the survey was quarterly, ABS head of labour statistics Bjorn Jarvis said.
The 3.4 per cent unemployment rate for women was the lowest since February 1974 and the 3.6 per cent rate for men was the lowest since May 1976.
In further positive news for the economy, the fall in unemployment occurred despite another increase in the number of people looking for work, with the participation rate rising to a record high of 66.8 per cent.
Even withmore jobseekers, there werealmost as many vacant positions(480,000 in May)as people still looking for work (494,000 in June).
This equates to around one unemployed person per vacant job, compared with three times as many people before the start of the pandemic, Mr Jarvis added.
Unemployment fell in every state or territoryexcept Western Australiaand is lowest in the ACT (3.1 per cent), Victoria (3.2 per cent), New South Wales (3.3 per cent) and Western Australia (3.4 per cent, up from 3.1 per cent in May).
South Australia and Tasmania have the highest unemployment rates in the country at just 4.3 per cent, with Queensland steady at 4 per cent and the Northern Territory at 3.7 per cent.
Economic log jam
Unemployment is now at levels where a shortage of available workers is forcing some businesses to restrict their operations.
At Ross Transport in Port Kembla, south of Sydney, around 20 per cent of its 60-strong truck fleetis stuck parked at the depot because there are notenough drivers.
True Ross-Sawrey says her transport business has at least a dozen vacant jobs.(ABC News: Adam Griffiths)
Tomorrow alone, we could probably take on 10 drivers and two mechanics just like that, manager True Ross-Sawreysaid.
The family-owned company, which has been around since 1975, has never found it so difficult to find staff.
Having trucks parked up in the yard is just pushing money down the drain, Ms Ross-Sawrey added.
She is one of many business owners offering higher wages to attract and retain staff.
'We normally do increases every year of 3 per cent,Ms Ross-Sawrey said.
This year, we've pushed through a 6 per cent increase, some are more, depending on what they do within our business.
The company transports items like building materials and non-refrigerated goods across the eastern states.
Ms Ross-Sawrey said staff shortages in transport are one of the factors driving supply chain issues.
It just means the capacity [freight] that we can take every day is significantly reduced, she explained.
So people are waiting longer to get their products, which is obviously affecting our customers and, ultimately, the consumer.
Coming out of retirement
The super-tight labour market and prospects of higher wages, combined with the surging cost of living, meanmore people like 66-year-old Rosemarie Paglinawa are comingback to work.
Rosemarie Paglinawan recently rejoined the workforce.(ABC News: John Gunn)
Ms Paglinawa rejoined the workforce through the help of a recruitment agency after two years offfollowing back and shoulder surgery.
I am really excited about coming to work every day, because I really like it, Ms Paglinawa said.
Ms Paglinawa works about 22 hours a week at Value Fresh preparingfruit and vegetables.
The 66-year-old has some advice for others thinking about getting back on the job.
For those who are injuredor stopped working, I advise you to come back to work so your strength will be back and you exercise, she said.
You will not get old.
Her boss, Hellen Swirski, said it had never been harder to find staff.
The company currently has about five vacancies and is also finding it tough to retain workers in a competitive job market.
Hellen Swirski, Value Fresh manager, used recruitment agency atWork Australia to hire Rosemarie Paglinawan.(ABC News: John Gunn)
With the pandemic, it's ongoing, you know the floods now, people can't even get to work, Ms Swirski said.
Ms Swirski believes increased overseas migration will bekey to solving the labour shortage plaguing many businesses in Australia.
The overseas migration that used to be here, I think that has something to do with not being able to find enough workers, she said.
Bad news for mortgage borrowers
Other than confirming a severe labour shortage for businesses, the only clear negatives in the data were a slight rise in underemployment —from a post-global financial crisis low of 5.7 per cent to 6.1 per cent —and a very slight decrease in hours worked.
Mr Jarvis said the fall in hours worked was mainly due to the latest COVID-19 Omicron wave and a bigger-than-recentwinter flu outbreak.
There [were]around 780,000 people working fewer hours than usual due to illness in June 2022, almost double the usual number we see at the start of winter, he observed.
The other negative from these figures will befor borrowers: Economists say it makes another half-a-percentage-point rate rise even more likely when the RBA meets again onthe first Tuesday inAugust.
The labour market is now tighter than the RBA expected at any point in 2022, which presents upside risk to their wage and inflation forecasts, noted BIS Oxford Economics analyst Sean Langcake.
In light of today's strong data, we expect the RBA will raise rates by 50 basis points at the August meeting.
Should that happen, this would make it three 50-basis-point rate rises in a row, with the cash rate target surging from emergency lows of just 0.1 per cent at the start of May to 1.85 per cent by early August.
A few analysts, such as Deutsche Bank's Phil Odonaghoe, are expecting the RBA to be even more aggressive.
In light of the beat on US CPI in June and the surprise decision by the Bank of Canada to hike rates by 100 basis pointsovernight, we reiterate our call for a 75-basis-points hike by the RBA at the August meeting.
That would mean a total of 2 percentage points of rate increases in the four months since the RBA made its first move in May.
https://www.abc.net.au/news/2022-07-14/unemployment-abs-jobs-data-june-2022/101237778
