November 14th 2024.
Australia's job market has been holding steady, with the unemployment rate remaining at 4.1%. This is in line with what experts had predicted, but there are some indications of weakness that could potentially benefit those with mortgages. The latest data from the Australian Bureau of Statistics shows that the economy added around 16,000 new jobs last month. While this is slightly lower than expected, it could be a positive sign for the Reserve Bank, possibly leading to a decrease in interest rates for the first time in years.
According to 9News Finance Editor Chris Kohler, "The jobs creation part of it is below what economists were expecting. So there's some signs of weakness just starting to surface in these numbers." Although the Reserve Bank may not necessarily need to see the unemployment rate increase in order to justify a rate cut, a decrease in job growth does signal the kind of weakness that they would need to see. "We are anticipating a rise in the unemployment rate, but it hasn't happened yet. At this point, February seems like the most likely time for an interest rate cut."
October marked the third consecutive month, and the fifth since April, where the unemployment rate has held steady at 4.1%, despite the sluggishness in other areas of the economy. "These are still extremely low unemployment figures. Given the slowdown in the economy, 4.1% is remarkably low," explains Kohler. "For seven out of the last eight months, economists have been overestimating and expecting the unemployment rate to rise towards 4.5%, but it's still staying low."
Although the numbers are strong, there are more people without jobs now than there were a year ago. However, this is still significantly lower than the levels seen at the beginning of the pandemic. "In October, the number of unemployed people was 67,000 higher than last year, but it was still 82,000 lower than in March 2020," says ABS head of labour statistics Bjorn Jarvis. "While there was an increase in employment, it was the slowest growth we've seen in recent months. It was lower than the average of 0.3% per month over the past six months."
Jarvis also notes that with population growth outpacing the small rise in employment and unemployment, the participation rate has slightly decreased to 67.1%. However, the employment-to-population ratio remains at a historical high of 64.4%. These figures indicate that while the job market is holding steady, there is still room for improvement and growth.
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