The jobs market is expected to hold in its strong position for another month despite a dire warning about the trajectory of the Australian economy.
The March labour force report from the Australian Bureau of Statistics will follow several months of ultra-low unemployment levels despite the Reserve Bank delivering a series of interest rate hikes since last year.
In February, the jobless rate returned to its 48-year low of 3.5 per cent and employment bounced back to 64,600 after seasonal factors drove falls in both December and January.
While Westpac economists said there were signs of softening starting to appear in the jobs market, they expected it would take some time to show up materially in the labour force numbers.
The bank’s economists predict the unemployment rate to remain at 3.5 per cent in March, with around 25,000 jobs added over the month.
NAB economists are also pencilling in an unemployment result of 3.5 per cent and an employment gain of 30,000.
The bullish jobs predictions come as Commonwealth Bank chief economist Stephen Halmarick says he expects household incomes to collapse, with any increases in pay packets to be offset with higher interest rates and increases in taxes.
“This will only get worse through 2023 on the lagged effect of higher interest costs and as wages growth struggles to keep up with the pace of inflation,” he told the Sydney Morning Herald.
Mr Halmarick predicted the Reserve Bank could be forced to cut interest rates by the end of the year amid a stalling economy and rising unemployment.
Treasurer Jim Chalmers admitted households were feeling financial pressures, adding that was why the government was focused on providing cost-of-living relief without fuelling inflation in the upcoming budget.
“One of the key pressures, one of the key features of the budget that we hand down next month will be this global economic uncertainty,” he told ABC TV on Thursday.
“The best response to economic uncertainty around the world is responsible economic management at home and that’s what we’ll see in the budget again.”
Dr Chalmers is in Washington for key talks with US officials about the global economic outlook.
– AAP
