News

Rate cut looking more likely after unemployment rate jumps again

17 May 2019

The Australian unemployment rate has crept up for the second month in a row and it’s pushing the Reserve Bank closer to an official interest rate cut.

Our nation’s unemployment rate rose in April, up from 5.1 per cent to 5.2 per cent seasonally adjusted.

The official figure was higher than the consensus forecast and the RBA’s desired improving outlook.

On the positive side, job creation numbers remained solid and more people have joined the participation rate in the workforce meaning there’s more people out there looking for work.

NAB economist Kaixin Owyong told the ABC that the higher jobless rate increased the chance of a rate cut next month.

“In recent statements, the RBA has said that a lack of improvement in the labour market would warrant a cut, such that today’s deterioration is likely to be of great concern to them,” he said.

“We now place a 50/50 chance of a cut in June.”

The Commonwealth Bank’s Belinda Allen said these latest unemployment figures were both good news and bad news.

“What is clear is that there is spare capacity as the trend higher in the underemployment rate and unemployment rate shows,” she said.

“The RBA could cut rates to try and close that gap and push inflation back towards target.”

“But this release tells us little more than the story of recent months and the RBA has left rates on hold in that environment.”

Victoria and New South Wales are the two strongest jobs markets of the bigger states.

Queensland was the only state for the month to record a fall in unemployment, but they continue to struggle with the jobs market, along with South Australia, Western Australia and Tasmania who all recorded an unemployment rate over 6 per cent in April.

Latest

The best thing you might want to do if investing in commercial property is assemble a ‘dream team’ of experienced operators that understand the process and understand why you are investing.

Read more

Mortgage Professional Australia has announced that Perry Finance Director and Melbourne Finance & Equity Group CEO Cameron Perry is one of MPA’s Top Ranked Commercial Brokers of 2022.

Read more

Prospective home buyers and investors are being warned to temper their expectations as the dust settles on the Reserve Bank’s first interest rate rise in years.

Read more

The Reserve Bank this week pulled the trigger on interest rates as expected, hiking the official cash rate by 25 basis points to 0.35 per cent.

Read more