Australia eyes sustainable job growth post-pandemic

The job market remains resilient amid rising interest rates, with anticipation high for upcoming labour force data.
By: | February 15, 2024
Topics: Australia | News

In a parliamentary committee session, Treasury Secretary Dr Steven Kennedy highlighted Australia’s potential to maintain the momentum gained in the job market during the pandemic recovery, provided appropriate policies are pursued.

Dr Kennedy emphasised that with the right policy decisions, there exists an opportunity to sustain the economy closer to full employment than has been achievable in decades. He underscored the potential of the life-changing impact this could have, particularly for disadvantaged Australians.

Despite a slight softening, the job market has demonstrated resilience, even amidst rising interest rates. Anticipation is high for the upcoming labour force data from the Australian Bureau of Statistics, expected to reflect ongoing strength, fuelled by improvements in job advertisements – a key indicator of underlying labour demand.

Dr Kennedy’s assertion of “no evidence” of a wage price spiral instills confidence in sustaining a lower unemployment rate than previously deemed sustainable. Additionally, the absence of shifting inflation expectations bolsters the case for a structurally lower jobless rate. 

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The Reserve Bank of Australia (RBA) shared this focus on preserving employment gains, opting for a more gradual approach to inflation reduction compared to other central banks. Dr Kennedy noted global trends in easing inflation, albeit at a slower pace, emphasising the transition to services-led inflation, which typically exhibits prolonged adjustment periods compared to good prices, reported Australian Associated Press.