EY senior economist Paula Gadsby said the unemployment rate was moving in line with the central bank’s expectations it will rise to 4.2 per cent by June, but a tight labour market risked inflation staying higher for longer by placing ongoing upward pressure on wages.
“The environment of moderating inflation and a strong labour market is a great outcome. This release won’t sway the Reserve Bank’s current ‘on hold’ stance at its next board meeting in May,” she said.
“The first quarter [inflation] data out next week are now the main point of interest for the Reserve Bank ahead of their May meeting.”
AMP deputy chief economist Diana Mousina said that taking a broader view of jobs figures, the labour market had clearly weakened since 2022 but held up much better than expected.
“Given the strength in the labour market, it is hard to see the RBA rushing towards cutting interest rates soon,” she said.
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“We have been expecting the RBA to cut around mid-year, but the resilience of the labour market means a high risk that the first cut comes later in the second half of the year, even with our expectation that next week’s March quarter inflation data will show a further improvement in reducing the pace of inflation.”
Finance Minister Katy Gallagher said the strength of the jobs market was a positive for those looking for employment and the budget’s bottom line.
“The fact that our labour market remains strong is not only good for anyone who’s working or who wants a job; it also has an impact, a positive impact on the budget,” she told Sky News.
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Shadow treasurer Angus Taylor said the rise in unemployment was a worrying development for households struggling with cost-of-living pressures.
“Household budgets [are] being smashed by higher prices, higher mortgage repayments and higher taxes, and people are working harder for less,” he said.
“On top of that, there are now more unemployed people than at the last federal election, and a record number of people are working multiple jobs just to keep their heads above water.
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Source Agencies
