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Economist warns of protracted recovery

There are further signs that the rise in unemployment has further to run in what could be a protracted recovery from Australia’s first recession since the early 1990s.

The latest National Australia Bank’s monthly business conditions index released on Tuesday fell in August, largely as a result on a weak employment component.

Business confidence also remained fragile, suggesting conditions could ease even further.

NAB chief economist Alan Oster says a protracted recovery and a resulting further rise in the unemployment rate will put pressure on policy markers to provide further support.

Assistant Treasurer Michael Sukkar has promised the federal government’s delayed budget on October 6 will have a “singular focus” on jobs.

The monthly Westpac-Melbourne Institute consumer survey for September is released on Wednesday.

In August its confidence index fell heavily after Victoria first entered into its harsh coronavirus restrictions.

The more frequent weekly ANZ-Roy Morgan consumer sentiment gauge rose 1.0 per cent, a surprising result after last week’s national accounts confirmed the economy is in recession.

But ANZ head of Australian economics David Plank was quick to point out the survey was carried out before the Victorian government announced it was extending its lockdown.

The Australian Bureau of Statistics will also release its monthly lending figures for July on Wednesday.

In June, new home loan commitments jumped 6.2 per cent reflecting the easing of COVID-19 restrictions on auctions and open houses in May.

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