The Reserve Bank of Australia (RBA) will look at the latest unemployment figures – 4.3%, roughly 650,000 people out of work – and see a labour market that is still “too tight”.
In other words, not enough people are unemployed for inflation to come down. Although that figure reflects almost none of the economic fallout from the war in the Middle East, it will strengthen the case for further interest rate hikes.
The logic of these expected rate hikes is to slow spending by pushing up mortgage repayments and, ultimately, pushing more people out of work. Those people will land in an employment services system that, as a 2023 parliamentary inquiry found, treats them more like fraudsters than citizens who need help.
