Some employers are still struggling to fill vacancies, but the latest data hints that the COVID jobs boom is coming to an end.
Key points:
- Australia's unemployment rate remained at 3.5 per cent in December, despite 9,000 more people becoming unemployed
- Some economists say there are signs that unemployment has reached its low point and will start rising
- The ABS says there was a large drop from the winter peak of workers being absent with illness
Australia's official unemployment rate has remained at 3.5 per cent, after the creation of just 900 extra jobs in September.
The fall in unemployment over the past couple of years to the lowest level in almost half a century has created opportunities for many people.
After about 20 years as a stay-at-home mum raising her four children, Christine Simon decided this was the year she would rejoin the workforce.
After seeking help from Aboriginal employment agency AMES Australia, which helped her into a short training course with labour hire and training firm Programmed, Ms Simon recently qualified as a forklift driver and secured a job in a warehouse in Sydney's west.
"I've walked in, I got a forklift ticket here, then after that they offered me a job straight away doing a forklift role, which I was ecstatic about," she told The Business.
For Ms Simon, the very tight jobs market created opportunities that did not exist previously.
"I went to a job agency a couple of years ago and I've knocked on the door and I said I'd been a stay at home mum for a period of time and they've just said 'sorry, we've got nothing for you' and they closed the door in my face," she said.
And there are still plenty of employment opportunities for people with in-demand skills.
Since first working on the Sydney Opera House 50 years ago, multinational engineering and professional services firm Arup has employed thousands of Australians.
Right now, the company is trying to fill about 200 roles, or 10 per cent of its local workforce.
"We really are seeing tightening in the skills market, which is affecting both our productivity and our ability to deliver here and now into the future," Arup Australasia co-chair Kate West told The Business.
"We're certainly seeing demand for engineers at an all-time high."
At the same time, the supply of qualified workers remains low, with Australia's hard border policy is still being felt by businesses like Arup.
"We're really challenged both by the migration tap been turned off during COVID and we're yet to see that migration really kick back in again," Ms West said.
"But we're also seeing a declining number of people move into engineering, so a declining number of people study engineering at university and then translate that into the workforce."
Jobs market 'starting to sputter'
But there are early signs that the balance between demand for staff and the supply of available workers is shifting.
Around 9,000 extra people became unemployed last month, according to the Bureau of Statistics estimates, but that was not quite enough to push the unemployment rate higher due to rounding.
The ABS figures also showed a net addition of just 900 jobs in September.
"While employment growth has slowed in recent months, there are still close to half-a-million people entering employment each month, and around the same number leaving employment each month," the ABS head of labour statistics Bjorn Jarvis observed.
But the number of jobs being advertised is falling away from record highs.
The latest Seek Employment Report shows the number of job ads was down 5.2 per cent in September.
However, job ads are still significantly higher than before the pandemic.
"The labour market in Australia remains extremely tight," Seek's managing director for Australia and New Zealand, Kendra Banks, said.
"We've seen job ads on Seek remain more than 40 per cent higher than we saw before the pandemic and that's really across almost every industry and almost every state and territory as well.
"Employers across the country are finding it very difficult to find the staff they need."
But perhaps less difficult than a few months ago, with increasing jobseeker activity.
While the number of jobs being advertised is falling, the number of people applying for those advertised roles is rising at the fastest rate in two years.
"We've seen applications per ad on Seek go up 10 per cent between July and August," Ms Banks observed.
"We're seeing great signs of increased job seeker activity, more people applying and applying to slightly more jobs when they do."
CommSec's senior economist Ryan Felsman said this was related to an increasing return of migrant workers.
"The reopening of Australia's international border has fuelled growth in the working-age population," he said.
"The expected return of foreign workers is helping to increase worker supply, with the working-age population estimate lifting to a growth rate of 1.2 per cent in September, just below pre-pandemic levels of around 1.7 per cent."
Marcel Thieliant from Capital Economics said the data provided further evidence that Australia's jobs market was "starting to sputter".
"The sharp slowdown in employment growth vindicates the Reserve Bank of Australia's decision to slow the pace of policy tightening," he noted.
"But we doubt it will prevent the bank from hiking its cash rate further.
"After all, our composite measure of job vacancies suggests that the unemployment rate will remain around the current very low levels for a while yet."
COVID absences fall sharply
The data also showed Australians worked 1 million fewer hours last month, but that was a decline of less than 0.1 per cent as COVID-19 absences dropped off dramatically from their winter peaks.
"Some of the slowing in hours worked reflected a higher-than-usual number of people taking annual leave in September. This follows the past two Septembers, when there were lower-than-usual numbers of people taking leave, given COVID-19 lockdowns and other restrictions," Mr Jarvis said.
"The number of people working fewer hours because they were sick was also higher than we usually see in September, but only around 14 per cent higher.
"It is no longer around two to three times higher, as it was earlier in 2022."
With fewer workers absent through illness, this is likely to be another factor seeing demand for extra workers drop off.