News Updates

Unemployment falls to 5.5 per cent in May

The number of hours worked by Australians has surged by the highest rate in a decade after the unemployment rate fell to its lowest level in four years on Thursday.

TD Securities Economist Prashant Newnaha said the result "surpassed street expectations by a country mile".

More than 52,000 people found full-time jobs in May while 10,100 part-time ones fell away, according to figures released by the Australian Bureau of Statistics.

The result defied the predictions of economists, who had pencilled in a boost of just 10,000 new jobs. Australia is now within half a per cent of the floor of the so-called "natural rate of unemployment", according to a bulletin released by the Reserve Bank on Thursday.

Economists are usually sceptical of single-month results, but the release of the latest figures has put the rebound in the labour market beyond doubt.

Capital economist Kate Hickie said the 42,000 rise in employment in May marked the third month of "an exceptionally strong rate" of job creation.

The news was welcomed by Treasurer Scott Morrison and Labor's employment spokesman, Brendan O'Connor.

unemployment falls 01

The news was welcomed by Treasurer Scott Morrison. Photo: Andrew Meares

"When Australian businesses are providing jobs they are showing confidence in the economy," Mr Morrison said in Parliament on Thursday.

The number of hours worked by Australians jumped by 31.1 million hours in May, the biggest monthly surge in 11 years.

unemployment falls 02

Opposition spokesman for employment, Brendan O'Connor, said the figures did not show the full story of the labour market.
Photo: Alex Ellinghausen

The most accurate measure of the labour market, the employment to working age population ratio, increased over the year to May by 0.2 percentage points to 61.3 per cent.

Mr O'Connor said the figures did not tell the full story of the labour market.

unemployment falls 03

The participation rate edged up, to 64.9 per cent, from 64.8 per cent in April. Photo: Erin Jonasson

"Despite the rise in hours worked this month, hours worked per capita is at levels not seen since the mid-1990s, which emphasises the growth in part-time employment," he said.

"Underemployment remains at record highs, with more than 1.1 million Australians wanting more work but not being able to find it."

The underemployment rate for the three months to May decreased by 0.1 percentage points to 8.8 per cent.

'Welcome result'

ANZ economist David Gladwell said the increase in hours, which is another measure of the number of jobs added to the economy, could eventually bring some relief to those struggling through historically low wage growth.

"This will be a welcome result for households, with the absorption of spare labour capacity a prerequisite for any improvement in wages growth," he said.

Ms Hickie was more sceptical.

"There still appears to be plenty of spare capacity in the labour market, which will keep wage growth weak and mean that the Reserve Bank probably won't raise rates until 2019," she said.

The economy is adjusting to the end of a resource boom and the central bank has cut its benchmark rate to a record-low 1.5 per cent in order to encourage firms to borrow and hire.

NSW boost

NSW is largely responsible for fuelling the end of that transition, Thursday's figures showed, contributing 30,000 new positions in May. The Bureau said that can also be partly attributed to their methodology of rotating the survey.

Employment to population ratio

unemployment falls 04

Source: Australian Bureau of Statistics, Labour Force, May 2017 

The figures, which beat expectations of a flat rate of 5.7 per cent, buoyed the Australian dollar, which jumped more than a third of a cent to US76.27¢, nudging a two-month high.

Rate cut 'off the table'

CommSec chief economist Craig James said the Reserve Bank wouldn't be in a rush to lift rates, but rate cuts "could now be taken off the table".

"It's hard to see the doomsayers finding too many negatives in the latest jobs report. Even the underutilisation rate fell sharply in the latest quarter," Mr James said.

"More jobs and more hours worked means more spending and more momentum for the economy. This is a result to be celebrated by consumers and businesses alike."

Watch video

Apply Now

So that we may assess your eligibility for a Business Innovation and Investment Visa, please complete the following Assessment Form.


So that we may assess your eligibility for a General Skilled Migration, please complete the following Assessment Form.

Speak to our Consultants

Speak to a Australian Migration Specialists Consultant Michelle Oztas: +27 11 783 9440

Speak to a Australian Migration Specialists Consultant Tracey Lawrence: +27 82 419 3696

Registered Migration Agent No. 9803463

Contact Details

Tel: +27 11 783 9440


Australian Mobile: +61 404 371 683

The Business Exchange
116 Oxford Road, Melrose Estates
Johannesburg, Gauteng
South Africa, 2196

Sign up for email updates

Sign up for email updates

Follow us on social media

Speak to our Consultants

We are eager to hear from you