23 Mar Demand for workers continues to strengthen
Demand for workers remains strong, even as the unemployment rate hits historic lows and is destined to go even lower.
The National Skills Commission said job advertisements posted on the internet rose by a further 3.6 per cent in February to stand at 269,700.
Job ads are now 36.2 per cent higher than a year earlier and massive 60.4 per cent above levels prevailing before the COVID-19 pandemic.
Advertisements increased in all eight occupational groups monitored by the commission, with community and personal service workers leading the way with a 7.6 per cent increase in the month.
Recruitment activity rose in all six states and the ACT, but declined 0.5 per cent in the Northern Territory. The sharpest increase was in Tasmania, up 6.6 per cent.
The most recent Australian Bureau of Statistics figures showed the jobless rate had fallen to four per cent, a level not seen for almost 14 years.
Federal Finance Minister Simon Birmingham on Wednesday hinted next week’s federal budget will point to an unemployment rate below four per cent in 2022/23.
Some 200,000 fewer people are expected to be on the JobSeeker payment, reducing the government’s welfare costs.
However, rising cost-of-living pressures and a downturn in consumer confidence is raising concerns over the outlook for household spending – a key plank for economic growth.
Figures released on Tuesday showed confidence has now sunk to levels last seen in September 2020 when Victoria was enduring the second COVID-19 wave.
At the same time, consumer inflation expectations have also hit their highest level in 11 years at six per cent, almost double the current annual rate at 3.5 per cent.
Surging petrol prices above $2 a litre as global oil prices rise on Russia’s invasion of Ukraine, as well as increases in other commodity prices, is the main factor behind escalating inflation pressures.
Reserve Bank governor Philip Lowe has warned inflation could hit at least four per cent, while economists believe it could reach five per cent or more.
Fitch Ratings believe the outlook for global growth has deteriorated significantly as inflation challenges intensify.
“Global inflation is back with a vengeance after an absence of at least two decades,” Fitch Ratings chief economist Brian Coulton said.
“This is starting to feel like an inflation regime change moment.”
Fitch has cut its world growth forecast for 2022 by 0.7 percentage points to 3.5 per cent, reflecting the drag from higher energy prices but also a faster pace of US interest rate hikes than previously anticipated.
It has also revised down world growth for 2023 by 0.2 percentage points to 2.8 per cent.
Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)