Unemployment rate at lowest since August 2008 | Liverpool City Champion
Australia’s unemployment rate unexpectedly fell to 4.2% in December, its lowest level since August 2008 and sparking speculation that the official exchange rate will rise later this year.
Economists had predicted that the unemployment rate would drop from 4.6% to 4.5% in November.
The decline was even faster than the Reserve Bank of Australia expected just a few months ago and did not expect to reach 4.25% before the end of 2022.
The Australian Bureau of Statistics said 64,800 people joined the labor force in December as part of a fresh recovery from last year’s COVID-19 lockdowns in New South Wales, Victoria and the United States. ACT.
The data did not take into account the impact of the Omicron variant in the later stages of December and in January.
Treasurer Josh Frydenberg clung to the numbers, noting that the jobless rate is now tied for the fourth lowest since the ABS began publishing monthly figures in 1978.
“We know there are great pressures right now, but we also know the economy is very resilient, and a standout player has been the labor market where jobs, jobs and more jobs have been created,” he told reporters in Melbourne. Thusday.
But Labor deputy leader Richard Marles said that if Prime Minister Scott Morrison tried to claim those figures were ‘mission accomplished’ in this election year, ‘it would be a complete fantasy’.
“If anything, they highlight exactly what is endangered by this government’s failure to handle the Omicron wave,” he told reporters.
But companies and economists hope Omicron’s impact will be short-lived.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said there were labor and skills shortages in many sectors.
This underscored the need for the government to boost labor force participation by investing in skills and establishing an ambitious skilled migration agenda, he said.
“While we can expect Omicron to disrupt these significant (jobs) gains in early 2022, these pressures should quickly reappear as case numbers begin to decline,” he told the PAA.
BIS Oxford Economics chief economist Sarah Hunter said experience from overseas suggests the impact of Omicron will be large but short-lived and less economically damaging than previous waves.
“Overall, the unemployment rate is expected to remain below 4.5% this year, and with companies still looking to recruit staff, this will create additional upward pressure on wages and domestic inflationary pressure,” he said. said Dr. Hunter.
“Today’s data reinforces our view that the RBA will tighten the cash rate much sooner than it is currently signaling.”
Inflation figures for the December quarter are due on Tuesday.
Separately, new data has shown that while Australians intended to spend a lot of money until 2022, there are already signs that these expectations will not be met due to the impact of Omicron.
The Commonwealth Bank of Australia‘s household spending intentions index rose 2.5% in December, its highest level since the survey began in July 2017.
The largest gains were recorded in the travel, transportation and retail sectors.
The index combines analysis of CBA payment data, loan applications and publicly available search activity on Google Trends.
ABC senior economist Belinda Allen said household spending data for December showed a sustained recovery from the Delta lockdowns, fueled by accumulated household savings estimated at some $260 billion.
“(But) we can see from our high-frequency credit and debit card data that there appears to be a drop in spending in January, with spending on services being more affected than spending on goods,” she said.
Australian Associated Press