Economists temper strong WA jobs figures

By AAP Newswire

Western Australia has recorded its single largest monthly drop in unemployment as the state continues to bounce back from the COVID-19 pandemic.

But economists are warning the state's recovery is unlikely to be straightforward and there could be further pain once federal support is withdrawn.

WA's jobless rate in August fell to 7 per cent from 8.3 per cent in July, according to the Australian Bureau of Statistics.

More than 32,000 jobs were created, although the vast majority were part-time positions.

Treasurer Ben Wyatt says 71 per cent of the jobs lost during the pandemic have been recovered with the gradual unwinding of restrictions.

"I think the WA economy is coming back on track much faster than any other in Australia which I think is very, very encouraging," he said on Thursday.

"When you have an economy like ours where we are really living as close to normal a life as you can, then you're unsurprised when the economy responds.

"A strong health response is the best economic policy as well. That again has been confirmed in today's unemployment data."

Mr Wyatt noted that 2021 was likely to provide economic challenges as support measures including the JobKeeper payments were wound back.

The treasurer has flagged a major infrastructure investment in next month's budget to help counter future disruptions.

"Historically when you see these big disruptions, whether they be a war or whatever, it's usually the year after when the government interventions both at state and Commonwealth level starts to unwind that the challenge very much occurs," he said.

"But what we're seeing is the fundamentals of the WA economy are strong."

WA's Chamber of Commerce and Industry said the latest figures brought WA back into the middle of the pack compared to other states.

"The eventual expiry of JobKeeper - which exceeded $100 billion this month - and many other support measures like rent freezes and fee waivers, all constitute a further storm front of economic uncertainty on our horizon," chief economist Aaron Morey said.

"We should not expect this to be a linear recovery."