This isn’t just a perception. Australia’s job market is booming. That means in September the nation only added 15,000 new positions overall. The Australian Bureau of Statistics (ABS) has shown that the economy added a staggering 8,700 full-time jobs last month. On top of that it netted a loss of 6,300 part-time positions. Economists are looking for 20,000 net new jobs in October. This wave would be enough to push the unemployment rate down to 4.4%.
With the unemployment rate at 67%, it is a job-seekers market with many Australians who want and are ready to work. The change in employment is much larger than it appears. It comes amidst a much harsher economy still reeling from inflation, which climbed to 3.2% in the September quarter. With the Reserve Bank of Australia (RBA) still intent on pursuing inflation in line with a 2% to 3% target, positive trends in employment may not last.
Job Growth and Employment Trends
The ABS, which releases monthly reports on employment trends, points to a continuing trend of strong job creation in nearly every economic sector. And full-time positions are defined as 38 hours a week or more. These jobs often provide additional benefits that further sustain workers. Pay equity part-time jobs tend to have a higher wage per hour. Unlike full-time roles, they can’t deliver the same stability or perks associated with them.
In September, the Australian economy lost 15,000 jobs. Within this wave, there was a flowering of full-time and part-time roles. The labor market’s incredible strength in the face of broader economic adversity. This recent growth might be a sign of an exciting new trend in our labor landscape.
By some predictions, Australia’s unemployment rate is slated to reach 4.4%. Thus, economists and policymakers alike watch this number like hawks. It continues to be an important indicator of overall economic health and labor market stability.
Inflation Concerns and Economic Implications
Like much of the world, Australia has gone through an acute inflation burst causing inflation to spike over the year to 3.2% in the September quarter. This jump is in large measure due to the repeal of electricity rebates in a number of battleground states. The RBA’s core measure – trimmed mean inflation – came in at 1.0% for the September quarter and 3.0% yoy.
“Trimmed mean inflation was 1.0 per cent in the September quarter and 3.0 per cent over the year, up from 2.7 per cent over the year in the June quarter. This was materially higher than expected at the time of the August Statement on Monetary Policy,” – Reserve Bank of Australia (RBA)
As consumer spending is one of the most crucial drivers of Australia’s economic growth, the increasing inflation rate is worrying for the future of consumer spending. The RBA’s big emphasis is on keeping a lid on inflation first, protecting inflation before promoting full employment. Therefore, as inflation heats up, there will likely be ripple effects on interest rates and broader financial markets.
Market Reactions and Future Projections
Some of the big four Australian banks have begun to increase their fixed rates. This turn, primarily driven by recent market developments, reflects a notable increase in expectations for future interest rate easing. International market analysts are watching these developments very closely. They have the potential to affect borrowing costs across the economy, both for consumers and businesses.
Valeria Bednarik, Chief Analyst at FXStreet, commented on the current market conditions:
“The AUD/USD pair is technically neutral ahead of the announcement, according to technical readings in the daily chart. Still, the pair pressures the upper end of its recent range, which somehow skews the risk to the upside.”
Analysts noted that external factors, such as developments in U.S. government policies, could overshadow domestic data releases:
“US government reopening [news] is likely to overshadow data if the shutdown ends before the Australian figures come out.” – Valeria Bednarik
That’s not to say the Australian job market isn’t booming! That’s 70,000 more than September and enough to send October job growth higher once again. The continuing concerns with inflation merit continued vigilance, as they could affect the direction of future jobs and economic policies.