Australia: Unemployment rate seen at 6.0% by year-end – UOB

Lee Sue Ann, Economist at UOB Group, assesses the latest labour market report in the Australian economy.

Key Quotes

“Australia's jobless rate fell to 6.4% in January, from 6.6% in the previous month. Employment rose by 29,100 in January, lower than December’s print of 50,000, but most these were full-time employment at 59,000 from 35,700 previously. Part-time positions fell by 29,800 from a gain of 147,300 in December. The participation rate dipped slightly to 66.1%, compared to December’s record-high of 66.2%.”

“Overall, the labour market continues to recover from the damages brought about by the COVID19 pandemic. Close to 90% of the jobs lost between February 2020 and May 2020 have now been recovered, and the level of employment is just 0.5% lower than a year earlier. Leading indicators, such as job advertisements, are consistent with further job gains in the coming months.”

“We now see unemployment at 6% by end-2021 (from 7% previously) and around 5.5% by end2022 (from 6.8% previously). However, our outlook for wages and inflation are little changed.”