Employment in Australia Ballooned Above Projected in November

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The Australian job market has exceeded expectations, as the data showed last Thursday. 

Investing.com first reported that Australia’s employment record is higher than forecasted. 

The rate of employed people bounced back similar to pre-pandemic levels. According to the Australian Bureau of Statistics, data shows that it grew from around 64,000 to 13.7 million last month. The data equates to a record-high 66.8%.

The increase in employment implies that people are starting to return to normal after the hit of the CoViD-19 pandemic. Some of the consequences of this market activity are higher wages. Moreover, the strength in the said market will further push the Reserve Bank of Australia to raise interest rates leading inflation to its 30-year high.

The bank increased interest rates by 25 basis points in December and hinted that further tightening the monetary policy was necessary.

However, even though workers’ salaries have increased, inflation is still persistent this year. Experts say that the booming of the labour market will be nullified for this reason. 

Furthermore, the higher interest rates can hurt the Australian economy. 

According to Bjorn Jarvis, head of labour statistics at the ABS, “The record high participation rate continues to show that it is a tight labour market, especially when coupled with very low unemployment.” 

“Australia is facing a shortage of skilled workers, which has seen employers increase wages to help retain talent,” said Investing.com.

But the Australian economy, which expanded slower than anticipated in the third quarter, has also suffered due to increased interest rates. The labour market may eventually consider this as the post-COVID economic boom fizzles out. 

Even still, solid employment trends point to strong household spending patterns, which are a crucial engine of economic expansion. The estimate from Thursday resulted in a slight increase in the Australian dollar.

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