At 3.9%, Australia's unemployment rate now officially begins with '3'. What's next?

Early in the election campaign, on April 14, we learned that Australia’s unemployment rate had slipped below 4% in March, to 3.95% – the lowest rate in 48 years.

But the Coalition was denied the bragging rights that would flow from an unemployment rate beginning with “3” because of a Bureau of Statistics convention of quoting the rate to only one decimal place, which meant the rate was presented as “4.0%”, the same as the month before (when it was actually 4.04%).

Thursday’s figure, for the month of April, has broken the barrier. Officially 3.9% (and actually 3.85%), it is clearly below 4% for the second consecutive month (because the March figure has been revised downwards to also round to 3.9%).

Read more: Technically unemployment now begins with a '3'. How to keep it there?

It means the unemployment rate has decisively broken out of the band of 5-6% it has been in or near for the past two decades and slipped below 4%.

It has fallen to where it was a half-century ago when (in the days the survey was quarterly) it jumped from 3.7% to 5.4% between November 1974 and February 1975.

Of course, 3.9% is an average. Over the country, the unemployment rate ranges from lows of 2.9% in Western Australia and 3.1% in the Australian Capital Territory, to highs of 4.5% in Queensland and South Australia.

For women, the rate is an almost half-century low of 3.7%, less than the 14-year low of 4.0% for men.

Australia isn’t alone. The unemployment rate is below 4% in the United States, the United Kingdom and New Zealand; and below 3% in Japan, Germany and Korea.

Further declines are expected. The Reserve Bank is forecasting unemployment of 3.6% by 2023, a few points less than the Treasury, which is forecasting 3.75%.

But the Bank is modest about its forecasting ability. It only claims to be 90% confident that by mid-2024 the rate will be somewhere between 2% and 5%.