• The latest job figures show unemployment jumped to 6.9% in September.
• There were nearly 30,000 people who lost jobs in the month, according to ABS data.
• Citing cuts to JobKeeper and JobSeeker amid a slow recovery, economist Sarah Hunter said there will be “further increases in the unemployment rate in the run up to Christmas”.
• Visit Business Insider Australia’s homepage for more stories.

The job market went backwards again in September, as 29,500 people dropped out of the labour force.

The latest jobs figures published on Thursday show that the headline unemployment rate ticked up to 6.9% last month, up from 6.8% in August. Still, it remains a big improvement from the 7.5% recorded in July.

It also marks a better than expected monthly result, with 40,000 people expected to exit the workforce in Septemeber. Of those lost, 20,100 jobs were full-time and 9400 part-time.

But as government support winds back quicker than the economy can recover, things are due to get worse by the end of the year.

“The rolling back of the JobKeeper program, continued reintroduction of mutual obligation for JobSeeker recipients and likely very muted pick-up in hospitality employment through the rest of this year — when the sector would typically hire temporary workers for the summer season — will lead to further increases in the unemployment rate in the run up to Christmas,” Sarah Hunter, chief economist at BIS Oxford Economics, said.

Hunter expects the RBA will now cut interest rates to 0.1% next month in anticipation.

The central bank has its work cut out for it. Again, a locked-down Victoria continues to drag on the national figures.

“Victorian employment has fallen 6.4% since March. By contrast, employment in the rest of Australia is down 2.2%,” Indeed Asia-Pacific economist Callam Pickering said.

New South Wales meanwhile stagnated, while Queensland and South Australia managed to create more jobs.

As mutual obligations are reintroduced everywhere but Victoria, Hunter said “the true impact of the pandemic on the labour market is becoming apparent”.

“The unemployment rate rose in New South Wales, Queensland and Tasmania, the states that are most exposed to the hospitality sector — a major employing sector where restrictions are still severely limiting activity,” she said.

“In contrast, conditions in WA appear to have stabilised somewhat, although still below pre-COVID levels. Employment grew by a solid 0.2% and the unemployment and underemployment rates fell back, confirming the state’s outperformance both in terms of the pandemic and the local economy.”

More encouraging is the fact that hours worked nationally actually rose by 0.5% over the month, albeit remaining 5.1% lower than pre-pandemic levels.

The participation rate, that is the proportion of Australians working or looking for work, remains suppressed at 64.8%.

More to come.

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