“We see the 3.5 per cent mark as around the floor for the unemployment rate,” he said. “Over time,the impact of the RBA’s recent interest rate rises will see the unemployment rate trend higher though that is a story for 2023.”
The markets and several experts including Commonwealth Bank economists expect the RBA to take the official cash rate to 2.6 per cent in October’s meeting.
But ANZ still expects the bank to raise rates by half a percentage point,taking the cash rate to 2.8 per cent,as senior economist Catherine Birch said Thursday’s strong labour data adds to the case for another big move.
“Despite the slight increase in August,we continue to expect the unemployment rate to fall into the high-2s by early 2023,” she said,noting that higher inflation,rising interest rates and falling real wages were also pushing more people to pick up more hours.
HSBC Australia and New Zealand chief economist Paul Bloxham also believes the unemployment rate could fall further,given the lag in effect between interest rate hikes and jobs data.
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Callam Pickering,Asia-Pacific economist for job site Indeed said there were signs the labour market was slowing but it remained tight.
“If we group July and August together - two months with large and opposing movements in employment and participation - we get the sense that the upward momentum in the labour market has slowed,” he said.
“The labour market could certainly tighten further - and should,based on the number of jobs vacant nationwide - but the gains from now on will be much harder to achieve.”
Employment Minister Tony Burke said while more people were getting the hours and work they wanted,they were still not getting pay rises.
“Unemployment remains at an historically low level,” he said. “But these economic circumstances should be resulting in stronger wages growth.”
Opposition employment and workplace spokeswoman Michaelia Cash said the data showed the government needs to move faster on allowing veterans and pensioners to work more hours and get more migrants into the country to help increase the supply of workers.
“While unemployment overall is still low,reflecting the strong position the former Coalition Government left the Australian economy in,today’s numbers show that we cannot take these circumstances for granted,” she said.
The ABS data found the number of unemployed people actively looking for work rose to 487,700,while the number of employed people neared June’s high of 13.6 million.
The number of people in full-time jobs increased by 58,800,while part-time employment fell by 25,300.
The overall increase in full-time work was driven by NSW,which added almost 74,000 positions. In Victoria,full-time employment fell for a second consecutive month to be down by 25,100 since its record peak in June.
The participation rate of working-age Australians lifted in August after falling in July,to 66.6 per cent,and the employment-to-population ratio rose to 64.3 per cent.