Australian Employment Holds Up for Now as Virus Blow Looms

(Bloomberg) -- Australia posted a surprise rise in jobs in March before the full impact of coronavirus restrictions was captured and was likely bolstered by hiring at supermarkets and associated supply chains to assist with a surge in spending ahead of the lockdown.

Confounding the expectations of most economists, employers added 5,900 roles versus estimates for a 30,000 drop. The jobless rate edged up to 5.2% from 5.1% in February and the participation rate held at 66%.

The statistics agency said the lack of impact from the virus was mainly due to surveys falling in the first half of March, when there was a relatively low number of confirmed COVID-19 cases and many of the trading restrictions had either not yet been announced or taken effect.

“Impact from the major COVID-19 related actions will be evident in the April data,” said Bruce Hockman, chief economist at the Australian Bureau of Statistics.

Australian Employment Holds Up for Now as Virus Blow Looms

The Australian dollar initially trimmed some of its decline after the data, but within an hour was back where it started, down 0.5% at around 62.90 U.S. cents.

Companies ranging from Australia’s two major airlines to casino operator Star Entertainment Group Ltd. to department store chain Myer Holdings Ltd. have furloughed or stood down tens of thousands of workers as demand collapsed amid forced shut downs.

The government and central bank responded with a massive fiscal-monetary injection worth 16.4% of gross domestic product to support an economy spiraling toward its first recession in almost 30 years. The Treasury forecasts unemployment to climb to 10% this quarter and said it would probably have reached about 15% if not for the government spending measures.

Among other details in the report:

  • Under-employment climbed 0.1 percentage point to 8.8%
  • Full-time jobs fell by 400 and part-time roles rose 6,400
  • Monthly hours worked in all jobs increased by 8.6 million hours or 0.5%
  • At a state level, the largest increases in employment were recorded in Victoria, up 13,300, and South Australia, up 3,500

In Mid-March, Coles announced it was recruiting more than 5,000 casual team members to work in its supermarkets across Australia to allow outlets to replenish shelves faster amid a pre-lockdown buying frenzy.

Qantas Airways Ltd. last month furloughed most of its 30,000-strong workforce and rival Virgin Australia Holdings Ltd. temporarily stood down 80% of its workforce. Star furloughed 90% of its 9,000 employees after the government ordered the closure of casinos.

Australia’s tourism and hospitality industries were hit first by the bushfire crisis over summer, then the initial coronavirus outbreak in top trading partner China stopping travelers during the peak time of Lunar New Year, and now by lockdowns at home.

The pandemic has already had a dramatic impact on consumer and business confidence. Reports this week showed household sentiment fell by the most in the 47-year history of the survey and the outlook for firms tumbled to the lowest reading ever.

©2020 Bloomberg L.P.

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