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Australian Employment Preview: Long way to recovery

Australian Employment Preview: Long way to recovery
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Reserve Bank of Australia Preview: No fireworks as the focus is on July s meeting

Wages growth desultory, unemployment stunning

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New data shows a drop in unemployment rate, one month post-JobKeeper

Richard Holden RBA governor Dr Philip Lowe. Source: AAP. The key narrative in Josh Frydenberg’s 2021 budget was the need to use more aggressive fiscal policy to drive unemployment down and wages up. Two key pieces of data this week indicate how things are tracking. On Wednesday the Australian Bureau of Statistics published wages data. The Wage Price Index grew 0.6% for the March quarter, or 1.5% over the past year. This is not a fast enough rate of wages growth to outstrip inflation by much, if at all, on a consistent basis. That’s a problem but not a surprise. The economy in general, and the labour market in particular, is still recovering from the COVID-19 pandemic.

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