With record job openings, Australia's unemployment rate now lowest in 48 years - Hindustan Times
close_game
close_game

With record job openings, Australia's unemployment rate now lowest in 48 years

Reuters |
Jul 14, 2022 07:54 AM IST

The jobless rate slid to 3.5% from 3.9%, well below forecasts of 3.8% and the lowest since August 1974.

Australia's unemployment rate dived to a 48-year low in June as hiring outstripped all expectations, while record vacancies suggested the labour market was set to tighten yet further and perhaps justify even larger increases in interest rates.

The number of unemployed also fell by an unusually large 54,300, while layoffs were limited.(AP FILE - Job applicants fill out forms.)
The number of unemployed also fell by an unusually large 54,300, while layoffs were limited.(AP FILE - Job applicants fill out forms.)

Figures from the Australian Bureau of Statistics on Thursday showed net employment had surged 88,400 in June from May, when it jumped 60,600. That blew away market forecasts of a 30,000 rise in June and brought gains for the year to a rousing 438,000.

HT launches Crick-it, a one stop destination to catch Cricket, anytime, anywhere. Explore now!

The jobless rate slid to 3.5% from 3.9%, well below forecasts of 3.8% and the lowest since August 1974.

The dive came even as more people went looking for work, with the participation rate climbing to a record high of 66.8%.

The underutilisation rate, which combines unemployment and underemployment, held at its lowest since 1982 at 9.6% and implied that wage growth would accelerate over time.

The number of unemployed also fell by an unusually large 54,300, while layoffs were limited.

"These flows reflect an increasingly tight labour market, with high demand for engaging and retaining workers, as well as ongoing labour shortages," said Bjorn Jarvis, head of labour statistics at the ABS.

He noted that the number of unemployed people, 494,000, now almost matched the number of vacancies, 480,000. "This equates to around one unemployed person per vacant job, compared with three times as many people before the start of the pandemic," he said.

With the economy essentially at full employment and inflation running red-hot, the Reserve Bank of Australia (RBA) is considered certain to keep lifting interest rates following last week's half-point hike to 1.35%.

Markets fully expect another 50 basis points in August, with even some talk of a more drastic move if coming inflation data shocks to the high side, as it has globally.

An eye-watering 9.1% June reading on U.S. consumer prices has investors wagering the Federal Reserve could hike by a full percentage point, while the Bank of Canada on Wednesday stole a march by doing just that.

Australia's consumer price report for the second quarter is due on July 27, and analysts had already feared inflation would hit its highest since 1990 at around 6.3%, with worse to come before the year ends.

"With the unemployment rate at a 48-year low, surveyed business conditions well above long-run averages, and COVID-related mobility restrictions fully eased, the economy is bumping-up against capacity constraints in many areas," said Andrew Boak, an economist at Goldman Sachs.

"The Australian economy remains on a path to much higher inflation and interest rates, having entered the tightening cycle with strong momentum."

Discover the pivotal moments that shaped India's electoral journey on the Eras section of our exclusive Elections product. Access all content absolutely free on the HT App. Download now!
Stay informed on Business News, TCS Q4 Results Live, Jio Financial Services Q4 Results Live along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, April 25, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On