The overall trend of a falling unemployment rate has remained intact from a medium term perspective, although recent employment reports show Australia’s unemployment rate to be stuck a little above 5% in the short term as the participation rate reaches new highs and the population increases. Leading indicators remain soft and economists expect another rate cut from the RBA in 2019 along with more cuts in 2020.
The latest Labour force figures have now been released and they indicate the number of people employed in Australia resumed growing after a minor contraction in June. The report shows the total number of people employed in Australia increased by 41,100 in July while the unemployment rate remained unchanged at 5.2%.
After the report was released, Justin Smirk, a senior economist at Westpac described it as “a robust update”. However, he noted the record-high participation rate and “while the employment growth continues to outperform expectations the unemployment rate is very sticky around 5.2%. As such, it is hard to see unemployment getting below 5% any time soon, let alone getting down to the RBA’s natural rate of 4.5%.”