/ 19 May 2023

A rate pause is possible as unemployment rises

Image source: iStock
Image source: iStock

Economists say a June rate hike looks more unlikely after the Bureau of Stats posted a weaker-than-expected employment result. Unemployment rose to 3.7% in April – up 0.2% on the previous month, going against economists’ predictions that it would hold steady. It was forecast that 25,000 jobs would be added to the economy in April, but 27,100 full-time positions were shed, and 22,800 part-time roles were created. Treasurer Jim Chalmers said the rate is unsurprising and “still remarkably low”, with the latest federal Budget forecasting a gradual rise in joblessness over the next couple of years. Some economists say it could be the first sign the labour market is cooling down along with this week’s as-expected wages growth data. And it could discourage the Reserve Bank from hiking the official cash rate when it meets next month. Fingers and toes crossed…

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