Australia has experienced its biggest quarterly fall in jobs in seven years, with the economy shedding 14,000 positions in the three months to August.
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Meanwhile, a new Organisation for Economic Cooperation and Development report says that although Australia has a relatively low jobless rate compared to other advanced nations, there had been a steady increase in long-term unemployment in recent years.
The Australian Bureau of Statistics published detailed labour force figures today and CommSec economist Savanth Sebastian said they showed that 10 of the 19 industry sectors lost jobs.
Manufacturing, which has been hit particularly hard by the high Australian dollar, was the worst affected. It lost 30,700 jobs. It was followed by education and training, down 29,200.
Conversely, the health care and social assistance sector added 27,700 jobs. It remains the country's largest employer, with 11.6 per cent of employment, just ahead of retail's 10.9 per cent.
"When it comes to employment growth the mining sector stands head and shoulders above the rest. Over the past year mining has expanded strongly with phenomenal job growth of just over 14 per cent,'' he said.
"With the demand for commodities remaining robust, mining has returned to its key role as driver of the Australian economy. In fact the strength in mining employment goes a long way in explaining the disparity in employment growth across the states."
Mr Sebastian said the job market appeared to be in good health when you looked at the surface, but "some disturbing trends come to light" when you dug deeper.
"It is clear that cracks are starting to appear in the labour market, and it is more a reflection of the soft readings on the economy translating to less hiring,'' he said.
"Sure jobs are growing in mining, but manufacturing and agriculture have shed jobs in greater numbers. And the number of people unemployed for more than a year jumped by over 15 per cent in August to eight-year highs. For the long-term unemployed it's not as easy to find work as many think."
Human face of the crisis
OECD Secretary-General Angel Gurra, issuing his organisation's latest Employment Outlook tonight, said unemployment remained stubbornly high in most advanced economies and the latest forecasts suggested job creation would remain anaemic in the near term
"Of all the facets of this crisis, from sovereign debt to banking, high unemployment is the elephant in the room. This is the human face of the crisis," he said.
"Governments cannot stand still. The challenges of tackling high and persistent unemployment, improving job opportunities and ensuring adequate social safety nets should be at the top of the political agenda."
He said that the short-term growth prospects for advanced nations were weaker than expected in May.
"The recovery stalled in the second quarter in large OECD economies, world trade stagnated over the summer and business and consumer confidence have dipped alarmingly,'' he said.
He was worried about the "serious threat of unemployment becoming entrenched'' in member nations.
"Long-term unemployment increased steadily in Australia between late 2008 and early 2011, but is still low compared with other OECD countries and compared with the levels reached in the first half of the 2000s. Currently, just under one in five unemployed people in Australia have been unemployed for 12 months or more, compared with more than one third for the OECD as a whole,'' it said.
The report praised Australia's unemployment benefit system as "strongly targeted to help the poorest households, who are most at risk of adverse consequences following job loss".
This was in contrast to many other countries.
"Australia's means-tested income support payments for the unemployed - such as Newstart and Youth Allowance - provide for a more uniform treatment of all unemployed persons while targeting benefits to those who need them most. The figure below shows that 47 per cent of unemployment benefits were paid to individuals in the poorest 20 per cent of households in Australia, compared with just 11 per cent in the United States," it said.
The report also found that about 40 per cent of Australian workers were over-qualified for their jobs, while a quarter were under-qualified.
"However, workers may be mismatched with their jobs in terms of their qualifications but not necessarily in terms of their skills,'' it said.
Rates on hold
Mr Sebastian said the ABS data was another reason for the Reserve Bank to leave interest rates on hold.
"The slowdown in new labour hiring is yet another sign that the domestic economy has lost momentum. The rate hikes over the past year are having a profound impact on consumer spending patterns. The housing sector is cooling while businesses continue to highlight weak trading conditions. While the higher Australian dollar continues to curb manufacturing and other export orientated industries,'' he said.
Mr Sebastian said the figures also disputed the common assumption that people were working longer and longer hours.
"Some of us are working longer hours but there are also a lot more part-time workers. Once all the hours are added together, the average actual hours worked is near record lows and certainly well down on a decade ago,'' he said.
"On average over the past year, average weekly actual hours worked stood at 34 hours, just above record lows, and down from 35.3 hours a decade ago.''
