Unemployment drops in May, ABS data shows

The data shows that 14 million people in Australia are working, a full million people more than before the start of the pandemic.

Many experts were expecting the seasonally-adjusted unemployment rate to stay steady.

But the drop offers a strong indication the economy is still running hot – meaning interest rates may not be put on hold next month as hoped.

Overnight the US Federal Reserve announced it would put rates on hold as inflation there eased.

The ABS said employment increased by nearly 76,000 people and unemployment decreased by just under 17,000 people.

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“The strong growth in employment in May followed a small decrease in April, around Easter, when employment fell by more than it usually would over the holiday period,” Bjorn Jarvis, ABS head of labour statistics, said.

“In May 2023, 64.5 per cent of people 15 years or older were employed, an increase of more than two percentage points since March 2020.”

But the underemployment rate rose 0.3 per cent, to a still historically low 6.4 per cent.

In non-seasonally adjusted numbers, the unemployment rate has been stuck at 3.5 per cent for the tenth consecutive month, after earlier data was revised down slightly.