Unemployment rate drops at end of blockades

Treasurer Josh Frydenberg said the latest jobs figures are a clear indication of what happens to the economy when closures are eased, with unemployment falling sharply to 4.6% in November.

It comes after a peak of 5.2% in October resulting in half the population being stranded to fight the coronavirus.

The Australian Bureau of Statistics also said the number of people employed increased by 366,100 during the month.

“Today’s jobs numbers are the clearest indication of what happens when you ease restrictions,” Frydenberg told reporters in Canberra as he delivered his mid-budget review. year.

The review shows that the unemployment rate is now expected to drop to 4.5 percent in the June quarter of next year and to 4.25 percent 12 months later.

It also forecasts economic growth of 4.5% in 2021 and 4.25% in 2022.

While Mr Frydenberg admitted that there are still uncertainties about the pandemic, he said Australia must learn to live with the virus.

“We are not going to see Omicron derail the recovery,” he said.

Commenting on the latest employment figures, ABS head of labor statistics Bjorn Jarvis said most people remained committed to their jobs during Delta’s lockdowns and to a greater extent than had been seen earlier in the pandemic.

“This connection to employment meant that, as restrictions were relaxed, many people were able to return to work quickly,” he said.

The easing of COVID-19 restrictions in NSW and Victoria had a big influence on national figures, with employment in both states increasing by 180,000 people and 141,000 people between October and November.

Speaking earlier on Thursday, Reserve Bank of Australia Governor Philip Lowe said he expected the unemployment rate to hit 4% by the end of 2023.

Dr Lowe believes that with the lifting of COVID-19 lockdowns, spending is rebounding quickly, although he admits that the Omicron variant outbreak poses a downside risk.

Nonetheless, he expects positive economic dynamics to continue through the summer, supported by Australia’s openness, high vaccination rates, strong fiscal and monetary support and the strengthening of household and business balance sheets.

But he reiterated that the RBA board would not increase the cash rate until real inflation was durably within the target range of 2-3%, which he did not expect. to happen before 2024.

“We are still a long way from that point. In our central scenario, the condition of an increase in the cash rate will not be met next year, ”he told the CPA Australia Riverina Forum in Wagga Wagga NSW.

“It will probably take time for this condition to be met and the board is prepared to be patient.”

National Australia Bank economist Tapas Strickland noted that Governor Lowe is again challenging financial markets’ expectations of an interest rate hike next year.

“But it’s interesting that he mentioned 2024 very little, which suggests to us that the RBA now considers 2023 to be more likely than before,” he said.

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