(Bloomberg) -- Australia’s economy shed more jobs than expected in August as an outbreak of the delta variant of coronavirus forced a prolonged lockdown in the nation’s two largest cities and prompted firms to cut workers.
Employment dropped by 146,300 last month, compared with economists’ forecast of an 80,000 decline, Australian Bureau of Statistics data showed Thursday. The jobless rate edged down to 4.5% as the participation rate slumped to 65.2% from 66%.
“Throughout the pandemic we have seen large falls in participation during lockdowns — a pattern repeated over the past few months,” Bjorn Jarvis, head of labor statistics at the ABS, said in a statement. “Beyond people losing their jobs, we have seen unemployed people drop out of the labor force, given how difficult it is to actively look for work and be available for work during lockdowns.”
The Australian dollar edged down after the release and traded at 73.36 U.S. cents at 11:55 a.m. in Sydney.
Sydney and Melbourne and large swathes of the east coast are under a lockdown that’s impacting about half the nation’s population. As delta overwhelmed their defenses, the leaders of New South Wales and Victoria are stepping up vaccinations to try to live with the virus, while the federal government has boosted aid to households and businesses.
Reserve Bank of Australia Governor Philip Lowe said this week that he expected the main hit to the labor market to be in hours worked, though he added it wouldn’t be surprising to see the jobless rate climb to the “high fives” for a short period.
Among other details in today’s report:
- Monthly hours worked dropped 3.7% in August
- Under-employment increased by 1 percentage point to 9.3%
- The under-utilization rate advanced 0.9 percentage point to 13.8% and
- Full-time jobs dropped by 68,000 and part-time by 78,200
The RBA this month pressed ahead with a tapering of its weekly bond purchases to A$4 billion ($2.9 billion) from A$5 billion, though it put back a planned review of the program by three months to mid-February. The extension, it said, reflected the delay in the recovery caused by the virus outbreak.
(Updates with further details from report.)
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