Unemployment rate fell to 4.4% in May

The underemployment rate rose by 0.1 percentage points to 5.9% in May.

The context: ABS head of labour statistics Sean Crick said the fall in hours worked in May brings the measure “back in line with employment growth since the end of the pandemic in June 2022”. He said hours worked in April was supported by less people taking leave over the Easter holiday period.

The fall in unemployment while inflationary pressures persist, with underlying inflation for May ticking up and remaining higher than preferred by the RBA, is likely to lend further credence to the RBA’s efforts to fight the recent inflationary shock proactively.

After the decision to hold interest rates steady in June, RBA governor Michele Bullock said inflationary risks were still tilted to the upside. At the time, the monetary policy board said it will do “what it considers necessary to achieve that outcome, including increasing the cash rate target further if required”.

What they said: “Over the past few months, we have recorded higher proportions of unemployed people waiting to start jobs who then remained unemployed in the following month,” Crick said.

“The backlog of people waiting to start a job has eased in May, contributing to the 40,000 rise in employment and 18,000 fall in unemployed persons.”