Australia’s jobless rate could edge lower for July after a surprise jump a month earlier wrong-footed economists.
Market expectations are for the unemployment rate to fall back to 4.2 per cent, when the Australian Bureau of Statistics releases its latest labour force survey.
After the unexpected June figures economists noted the higher-than-anticipated rise was partly because of a sub-sample with a higher than average unemployment rate being rotated into the survey.
So a modest reversal in Thursday’s print should not be over interpreted as a sign the labour market is becoming tighter.
Indeed, Reserve Bank governor Michele Bullock noted various indicators suggest conditions in the labour market had eased in recent months.
“There’s some sense in which the labour market is easing. There are some indicators that we think suggest that things are still a little bit on the tight side,” she told reporters after the central bank cut interest rates by 25 basis points on Tuesday.
“If we can maintain where we are I don’t think that’s a bad thing.”
Still, the RBA will be watching closely and a substantial deterioration in the jobs market could boost the argument for a follow-up cut in September.
Deloitte Access Economics partner David Rumbens expects employment growth to ease through 2025 before stabilising, as public spending decelerates and overseas migration trends downward.
Despite the resilience of the labour market since the pandemic, it was being undermined by poor productivity growth, he said in Deloitte’s quarterly employment forecasts report.
The fall in productivity since March 2022 had cost Australia about $150 billion in forgone economic activity per year, he estimated.
Mr Rumbens urged the government to target high-impact, long-term reforms in its upcoming economic roundtable, including an overhaul of the tax system and reduced regulation, to help get productivity moving again.
One regulatory change identified by the Australian Securities and Investment Commission on Wednesday could mean $8.7 billion in extra investment and an additional 35,000 homes built by institutional investors over the next five years.
The Property Council backed ASIC’s review of RG 97 – a regulation that required investors like super funds to disclose stamp duty when reporting fees involved in housing investments.
It results in housing investments appearing more expensive than they really are, which penalises super funds for backing long-term housing supply projects, said Property Council chief executive Mike Zorbas.
Treasurer Jim Chalmers said it had the potential to be a really important change.
“It’s a good example of where working together, we can identify regulation which is not serving its intended purpose, we can work with the regulators to act on some of that regulation where it’s appropriate to do so, and we can get a good outcome,” he said.
Australian Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national newswire and has been delivering accurate, reliable and fast news content to the media industry, government and corporate sector for 85 years. We keep Australia informed.
