Australia's rate of economic growth and unemployment

Economic growth is a measure of an economy's annual rate of change in real gross domestic production (GDP). The most important factor affecting the rate of economic growth is aggregate demand which is the total expenditure of an economy. It consists of consumption; investment; government expenditure (fiscal policy); and the ratio of imports to exports. The demand for labour is derived from the demand for goods and services. This is due to the fact that …

…of the workforce because there isn't the capacity for them and they find it very difficult to find employment. When the rate of economic growth picks up a little however, these people tend to re-enter the workforce. Initially this will make unemployment figures look worse, but in actual fact, just the participation rate has increased. With sustained strong growth over time, the new participants to the workforce will find employment and unemployment figures will fall.