The Reserve Bank of Australia and the Treasury expect unemployment to fall below four per cent in the coming months to levels not seen since the early 1970s.
The latest official figures show that unemployment fell to four percent, a level not seen in almost 14 years.
The skillful job posting report from the National Skills Commission on Wednesday will provide a further update on the progress of getting more people into work.
Federal Finance Minister Simon Birmingham hinted on Wednesday that next week’s federal budget will point to an unemployment rate below four percent in 2022/23.
About 200,000 fewer people are expected to be on the JobSeeker payment, reducing the state’s welfare costs.
“It’s one of the fundamental benefits of a strong economy: low unemployment rates give us the double bonus of lower payments on the social safety net and higher incomes from Australians who contribute and therefore pay taxes as part of those contributions,” he said. said Senator Birmingham to The News. Australian.
However, rising cost of living pressure and a fall in consumer confidence raise concerns about the outlook for household consumption – a key plan for economic growth.
Figures released on Tuesday showed that confidence has now fallen to levels last seen in September 2020, when Victoria endured the second COVID-19 wave.
At the same time, consumer inflation expectations have also hit the highest level in 11 years at six per cent, almost double the current annual rate of 3.5 per cent.
Rising gasoline prices above $ 2 per barrel liters, as global oil prices rise due to Russia’s invasion of Ukraine, as well as increases in other commodity prices, are the main factor behind the escalating inflationary pressures.
Reserve Bank Governor Philip Lowe has warned that inflation could hit at least four percent, while economists believe it could reach five percent or more.
Fitch Ratings believes that the outlook for global growth has deteriorated significantly as inflationary challenges intensify.
“Global inflation is back with a vengeance after an absence of at least two decades,” said Fitch Ratings chief economist Brian Coulton.
“This is starting to feel like a moment when the inflation regime is changing.”
Fitch has lowered its world growth forecast for 2022 by 0.7 percentage points to 3.5 percent, reflecting moves from higher energy prices but also a faster pace in US interest rate hikes than previously expected.
It has also downgraded world growth for 2023 by 0.2 percentage points to 2.8 percent.
Australian Associated Press