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).
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).