Australia’s unemployment rate has dropped to 4.4 per cent in May, down from the four-year high of 4.5 per cent in April.
New data released by the Australian Bureau of Statistics (ABS) on Thursday showed that 40,300 more people were employed.
From that data, 35,000 were working part-time and 5000 were full-time.
ABS head of labour statistics Sean Crick said the rise in employment can be attributed to a backlog of jobseekers entering the workforce.
“Over the past few months, we have recorded higher proportions of unemployed people waiting to start jobs who then remained unemployed in the following month,” he said.
“The backlog of people waiting to start a job has eased in May, contributing to the 40,000 rise in employment and 18,000 fall in unemployed persons.”
While the number of employed people has grown, the total number of hours worked has decreased, but this difference could be due to more people working during the Easter Holiday.
“In April, less people took leave during the Easter holiday period and instead worked their usual hours, contributing to non-seasonal strength in hours worked,” Crick said.
“The fall this month brings hours worked back in line with employment growth since the end of the pandemic in June 2022.”
Economists and major banks have previously forecasted that the unemployment rate would reach 5 per cent over the coming year.
The Reserve Bank of Australia will hand down its next interest rates decision in August, after rates were at 4.35 per cent last week.
While economists warn that there could be more rate hikes to come, despite the new employment data, Treasurer Jim Chalmers said the findings show the strength of the labour market.
“This is a very welcome reminder of the strength of our labour market and the resilience of our economy in the face of all this global uncertainty,” he said in a statement.
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