Australia's unemployment rises to 4% in December

Australia's unemployment rises to 4% in December
Australia's unemployment rises to 4% in December

Australia's unemployment rate increased to 4.0 percent in December 2024, up from 3.9 percent in November, according to the latest data from the Australian Bureau of Statistics (ABS). Despite the slight rise in unemployment, the labor market showed mixed signals with several positive indicators.

Employment grew by 56,300 people in December, exceeding the monthly average of 0.3 percent seen throughout 2024. Meanwhile, the number of unemployed individuals increased by 10,300. The participation rate reached a record high of 67.1 percent, marking a 0.5 percentage point increase from the previous year and 1.6 percentage points higher than March 2020.

Regional unemployment rates varied across the country, with Victoria recording the highest at 4.4 percent, followed by Tasmania, Northern Territory, and South Australia at 4.2 percent. The Australian Capital Territory maintained the lowest rate at 3.1 percent.

The employment-to-population ratio also achieved a record high of 64.5 percent, while the underemployment rate decreased to 6 percent. Youth underemployment remained elevated at 14.1 percent.

Analysis from Ai Group chief executive Innes Willox highlighted concerns about the nature of job growth in Australia. While the labor market has remained resilient, recent employment gains have been predominantly driven by public sector and "non-market" private industries such as health, education, and public administration. Since 2019, public sector employment has grown by 17 percent, and non-private industries have surged by 43 percent, while the private sector added only 9 percent of jobs.

Willox warned about the sustainability of this government spending-dependent growth, emphasizing the need for stronger private sector participation. He urged governments to prioritize private sector investment and job creation in 2025, noting that the current taxpayer-funded jobs boom may not be sustainable long-term.