Young people and those on lower incomes are likely to suffer more if inflation cannot be tamed and unemployment surges.
High inflation was already disproportionately hurting the most vulnerable, Reserve Bank Governor Michele Bullock has explained, and a failure to temper prices pressures in a timely fashion would not be felt evenly either.
If inflation cannot be returned to target quickly enough and firms and households come to expect fast-rising prices, interest rates may need to go even higher.
“Ultimately, we would need to slow the economy down by more, which would result in a larger rise in unemployment and higher risk of recession,” Ms Bullock said in a speech on Thursday
The cost of job loss was “very high” to the individual, leading to lower earnings over their career.
Job losses were also disproportionately borne by the young, those who were less educated, and people on lower incomes and with less wealth, including renters.
“A weak labour market also hurts those who keep their jobs, whether through a reduction in hours worked or lower wages growth,” Ms Bullock said.
Many Australians have been relying on extra work and second jobs to make ends meet.
Hundreds of thousands have been working more than one job and Friday’s update on multiple job holders from the Australian Bureau of Statistics may show a continuation of this trend.
The ABS is also set to release fresh lending data on Friday.
