Australia: Unemployment expected to increase by year-end – UOB

The jobless rate in Australia is seen picking up pace towards the end of the year, according to Economist at UOB Group, Lee Sue Ann.

Key Quotes

“Australia's jobless rate unexpectedly slipped from a 22-year high of 7.5% in July, to 6.8% in August, as employment surged past expectations helped by part-time work… Despite the improvement in unemployment, the underemployment rate remained elevated at 11.2%, 2.4 percentage points above the level in March.”

“Whilst the latest numbers definitely came as a surprise, job gains were held back by Victoria, where employment fell 1.3% m/m in August. Employment rose 1.7% m/m across other regions. Nonetheless, the latest jobs report is certainly a testament to the government’s signature Jobseeker employment subsidy – that will extend into 2021 – as well as monetary stimulus.”

“We still look for unemployment in Australia to climb higher into year-end before gradually recovering in later part of 2021, provided COVID-19 developments comes under control as expected (i.e. state borders opened by year end but international borders not until this time next year) and there is a strong stimulus package in the October budget.”