SYDNEY, April 21 (Reuters) – Australia may have lost three quarters of a million jobs between mid-March and early April when large chunks of the economy shut down in the fight against the coronavirus, pointing to a sharp spike in the unemployment rate in coming months.
Figures from the Australian Bureau of Statistics on Tuesday showed jobs recorded by the Australian Taxation Office payrolls system fell 6% between March 14 and April 4.
Total wages paid by businesses declined 6.7%.
The data comes as minutes of Australia’s central bank’s April policy meeting, also out on Tuesday, showed the country’s gross domestic product (GDP) could shrink “significantly” in the June quarter and remain subdued through September.
The number of coronavirus infections in Australia is relatively small with the rate of growth slowing significantly in recent days.
However, the outbreak has spread rapidly from less than 100 cases in March to more than 6,600 now, prompting the government to shut down non-essential businesses, ban overseas travel and large gatherings while enforcing social distancing rules.
The Reserve Bank of Australia’s (RBA) April 7 meeting minutes showed board members discussed the impact of these restrictions on the economy.
While there had been deferrals and cancellations of business investment plans, board members expected household consumption to also remain downbeat. Services export would take a hit for months assuming current border controls stay in place for some time.
In a bid to blunt the impact, Australia’s conservative government announced a A$320 billion fiscal stimulus plan while the RBA went all in cutting the cash rate to a record low 0.25% and launching an “unlimited” quantitative easing.
Despite the measures, Tuesday’s ABS data showed around 780,000 jobs may have been lost by early April.
This was the first release of the payrolls series, which uses data reported by businesses through the ATO to provide much more timely numbers than the monthly jobs report.
The ATO system covers about 99% of substantial employers, those with 20 or more workers, and 71% of smaller employers.
The largest drop was in the accommodation and food services industry where a quarter of jobs were lost, while arts and recreation shed almost 19% of workers.
“The largest impact of net job losses, in percentage terms, was for people aged under 20, for whom jobs decreased by 9.9%,” said Bjorn Jarvis, head of labour statistics at the ABS.