Australia's unemployment rate has defied market expectations, falling for the second month in row since lockdowns were enforced on much of the south-east of the country.
Latest labour force data from the Australian Bureau of Statistics has revealed the unemployment rate in August fell 0.1 percentage point to 4.5 per cent, with the fall being fuelled by deteriorations in the participation rate and hours worked.
Economists were anticipating a rise in the unemployment to around 5 per cent, however ABS head of labour statistics, Bjorn Jarvis said the decline is reflecting a scenario where workers are exiting the workforce entirely due to lockdowns.
The national participation rate fell 0.8 percentage points to 65.2 per cent, while NSW had a more pronounced drop and fell 2.5 per cent.
"The fall in the unemployment rate reflects a large fall in participation during the recent lockdowns, rather than a strengthening in labour market conditions," Mr Jarvis said.
"Throughout the pandemic we have seen large falls in participation during lockdowns - a pattern repeated over the past few months.
"Beyond people losing their jobs, we have seen unemployed people drop out of the labour force, given how difficult it is to actively look for work and be available for work during lockdowns."
ANZ's economic team were anticipating the jobless rate to climb to 4.8 per cent, while Westpac placed its bets on a 0.4 percentage point rise to 5 per cent.
NAB Economics expects unemployment will peak to 5.2 per cent as a result of the third wave lockdown.
Mr Jarvis noted the current lockdown is having a similar impact on the labour market to what occurred during Victoria's extended lockdown in 2020.
National hours worked fell 3.7 per cent over August, while the number of employed people 146,000.
Hours worked in the ACT fell 2.5 per cent.
Mr Jarvis said hours worked remained the best indicator of how lockdowns are impacting the economy, as it is showing the productivity of workers who may not have lost their job.
"There are always some employed people who are temporarily working reduced hours or no hours in a given month, but the current wave of lockdowns has seen this become more common," he said.
"Compared with August 2019, there was an extra 1.2 million employed people who worked reduced hours for economic and other reasons in August 2021, including 532,000 who worked no hours for those reasons."
