The unemployment rate rose by 0.2 percentage points to 4.5 per cent in April, up from 4.3 per cent in March, according to the Bureau of Statistics.<\/p>\n
The number of employed people fell by 18,600 in April, while the number of unemployed people rose by 33,000.<\/p>\n
A drop in female employment drove the overall fall.<\/p>\n
The number of unemployed people looking for full-time work increased by 11,000, and unemployed people looking for part-time work increased by 22,000.<\/p>\n
“Compared to what we usually see in April, more people remained unemployed this month,” ABS head of labour statistics Sean Crick said.<\/p>\n
“Both full-time and part-time employment fell, by 11,000 and 8,000 people respectively.”<\/p>\n
Evidence of loosening labour market<\/p>\n
Job ads increased\u00a00.2 per cent in the month of April, and are down\u00a01.9 per cent in the 12 months to April, according to employment website SEEK.<\/p>\n
Economists say evidence is beginning to build of a loosening labour market.<\/p>\n
“With inflation rising and fuel costs driving up business and living cost pressures, hiring confidence is understandably muted as we head into the final months of the financial year,” SEEK chief economist Blair Chapman said.\u00a0<\/p>\n
Unemployment data is known as a lagging indicator.<\/p>\n
There are fears the jobless rate could rise from here given the macroeconomic headwinds facing the global and Australian economies.<\/p>\n
“Firms’ hiring decisions tend to lag economic shocks. This [latest unemployment increase] would be a lightning-fast response if it is purely a reaction to the ongoing US-Iran crisis,” Oxford Economics Australia economist Harry McAuley said.\u00a0<\/p>\n
“It more likely reflects pre-war economic sentiment, compounded by the expected impacts of the oil crisis.”<\/p>\n
Data may hold off interest rate rise\u00a0<\/p>\n
Oxford Economics says the unemployment rate could approach 5 per cent.<\/p>\n
“We expect the unemployment rate to peak at 4.8 per cent in late 2027,” Mr McAuley said.<\/p>\n
The firm believes a slowdown in private consumption and a tougher business environment could slow hiring.\u00a0<\/p>\n
“Business confidence has cratered under higher inputs and borrowing costs, which will flow through their hiring decisions,” he said.<\/p>\n
This data could put less pressure on the Reserve Bank to hike interest rates again in June.<\/p>\n
Capital Economics senior economist Abhijit Surya said he thought a strong pick-up in Australia’s jobless rate in April made it “all but certain that the bank will leave rates on hold at 4.35 per cent at its June meeting”.<\/p>\n
“However, with underlying inflation set to accelerate further, we\u2019re not convinced the Bank will call time on its tightening cycle,” he said.<\/p>\n
KPMG economist Brendan Rynne agrees one more RBA interest rate hike is on the cards.<\/p>\n
“Today\u2019s figures may give the RBA some cover to pause next month and take stock, but further rate rises later this year are likely,” he said.<\/p>\n
Mr McAuley described the Reserve Bank’s policy challenge as “threading an incredibly fine needle” with “balancing employment and inflation”.<\/p>\n
“The labour force has been outperforming expectations for the better part of five years, while inflation has been trending above target for most of the same period,” he said.\u00a0<\/p>\n
“The most recent decision to hike rates tipped the scales towards fighting inflation, which in the current economic environment was likely necessary.\u00a0<\/p>\n
“However, we expect this will impact workers as businesses scale back their labour costs.”<\/p>\n
‘Growth recession’ fears<\/p>\n
Concerns remain Australia could be facing a prolonged period of rising inflation and unemployment.<\/p>\n
Betashares economist David Bassanese sees Australia entering a phase of weak growth.<\/p>\n
“My expectation is that Australia only needs to experience a \u201cgrowth recession\u201d rather than an outright recession this year \u2013 namely a period of positive but below-trend economic growth that eases capacity constraints and helps bring down inflation,” he said.<\/p>\n
“My base case remains that the RBA will hold at the June policy meeting and, by the time the August meeting comes around, the case for further tightening will have eased.”\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"The unemployment rate rose by 0.2 percentage points to 4.5 per cent in April, up from 4.3 per…\n","protected":false},"author":2,"featured_media":684334,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-684333","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/684333","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=684333"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/684333\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/684334"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=684333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=684333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=684333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}