Original article by Leith van Onselen
MacroBusiness – Page: Online : 24-Aug-22

The fall in Australia’s official unemployment rate to 3.4% has capped off a tremendous post-pandemic rebound that has delivered the best labour market in generations. The result also signalled that the boom is nearing an end, with total jobs and hours worked falling sharply in July; the unemployment rate only fell due to a decline in the participation rate. The collapse in immigration during the pandemic is the primary reason why Australia’s unemployment rate has fallen to a 48-year low. However, it has been widely reported that the Albanese Government will use the upcoming Jobs & Skills Summit as a trojan horse to increase Australia’s permanent migrant intake to its highest ever level. Accordingly, Australia next year faces its biggest ever intake of net overseas migration, easily eclipsing the all-time high 316,000 recorded in 2008 during the Rudd Government’s reign. Meanwhile, the unemployment rate is a lagging economic indicator that will not have captured the RBA’s aggressive rate hikes over the past four months. Never has the RBA commenced a rate tightening cycle with consumer confidence in such a poor state. Outside of the pandemic, consumer confidence is tracking around its lowest level since the early 1990s recession. Ramping-up immigration at the same time as the economy grinds to a halt from aggressive rate hikes is bad news for Australian workers. They will soon find it more difficult to score and job and negotiate higher wages.

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