Employment in Australia is now above pre-COVID levels

The Reserve Bank of Australia (RBA) predicts that Australia will reach full employment within two years, following higher-than-expected unemployment rates and 12 years of high-level classified ads.

At today’s board of directors, RBA upgraded its economic forecasts while keeping cash rates at near zero percent. This will remain at its current level until “2024 at the earliest”.

“Australia’s economic recovery is stronger than expected and is expected to continue.” Rowe said.. “This recovery is especially evident in the strong growth of employment … there are now a number of people working above pre-pandemic levels.”

The RBA predicts that the unemployment rate will drop to 5% by the end of this year and reach 4.5% by the end of 2022.

“The Board is committed to maintaining highly supportive financial conditions to support the return to full employment and inflation in line with goals in Australia,” Rowe said. “The cash rate will not rise until the actual inflation rate stays within the 2-3% target range.”

Economic activity has shown a strong recovery, but inflation remains restrained in most economies. Recent CPI data According to the Australian Bureau of Statistics (ABS), inflation rose 0.6% in the March quarter.

Epoch Times Photo
CPI Growth Chart, 2021. (Australian Bureau of Statistics)

Central banks also continue to monitor housing borrowing trends and markets. Rowe reiterated that banks are focusing on the economy as a whole, rather than moving interest rates to target home prices.

Home prices reached 2.8% growth in March, the fastest monthly growth in more than 30 years. Many economists also predict a significant surge in home prices later this year, with an estimate of 17%.

The housing market has been driven in part by low borrowing costs. This means that consumers are more willing to bear higher levels of debt.

Citi economist Josh Williamson believes real estate prices will rise 15% this year and fall to 1.5% next year.

“We believe that affordable prices will peak and are likely to worsen in the coming months, as wage growth is unlikely to rise significantly and interest rates are not expected to fall,” Williamson said. Mr. says. Said Australian person.

ANZ Research (pdf) It turns out that job advertisements have been on an upward trend for 11 consecutive months.

“Companies looking to hire new workers are unlikely to be heavily dependent on JobKeeper’s payments as a whole,” said Catherine Birch, senior economist at ANZ.

The RBA’s full monetary policy statement will be released on Friday.