Qld unemployment rate falls slightly to 6.1% – rising participation a good sign

The March labour force data released today by the ABS, showing the unemployment rate falling to 5.8% from 6.1% in February, were good news for the Australian economy, as reflected in the dollar surging and one prominent commentator forecasting an increase in interest rates later this year (see MacroBusiness’s post Bloxo: Rate hikes this year!). While falling slightly (by 0.1 percentage points) in March, the Queensland unemployment rate stills remains above 6% at 6.1% in seasonally adjusted terms (see chart below).

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I agree with Pete Faulkner’s assessment that Queensland’s rising participation rate is a good sign of a recovering labour market (see Strong jobs sees UR fall; QLD also looks better and the chart below). The participation rate is the fraction of the civilian population aged 15 or over that is in the labour force – i.e. either already in work or actively looking for work and hence counted as unemployed. It typically rises when an economy is recovering because a number of people – particularly the so-called marginally attached to the labour force – decide it might be time to begin actively looking for work now that conditions are better (see my post People marginally attached to the labour force behind participation rate movements).

prate

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5 Responses to Qld unemployment rate falls slightly to 6.1% – rising participation a good sign

  1. Jim says:

    Gene

    Did you look at the changes in full time vs. part-time work? I suspect that most of the net growth in employment and the increase in the participation rate is probably a function of more part-time jobs being created, while growth in full-time employment is stagnant.

  2. The Happy Hillbilly says:

    According to Australian labour market specialist Bill Mitchell, the fall in the UR was entirely accounted for by the fall in participation (on the national picture) and the overall picture remains one of general stagnation and weakness.

    It is good that it seems a little better in our state though. My concern remains as to what happens when mining infrastructure investment actually does begin to decline from such lofty heights.

  3. Katrina Drake says:

    Unemployment dropping in Queensland ? that needs closer interpretation. Discussion amongst the mother club would suggest that will be our graduates 20-30yo moving to Melbourne for opportunities in science and research. Other jobless young talented mobiles moving to Northern Territory and Western Australia as they are hiring, Queensland is not.

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