Australia’s unemployment rate is now looking less likely to breach five per cent as feared when the country’s major states first went into lockdown battling the coronavirus Delta variant.
But economists expect it will still nudge higher as people left stay-at-home orders and started hunting for a job again.
The Reserve Bank of Australia in its quarterly statement on monetary policy released on Friday expected the jobless rate to be a little below five per cent at the end of 2021, and then to decline steadily to four per cent by the end of 2023.
The unemployment rate was 4.6 per cent in September after hitting a near-13-year low of 4.5 per cent in August, a decline that had more to do with people giving up the search for work than the strength of the labour market.
The Australian Bureau of Statistics will release its labour force report for October on Thursday, which will cover the first two weeks of the month and capture the initial stages of NSW’s departure from lockdown.
However, Victoria remained in shutdown during this period.
Economists’ forecasts for October point to an unemployment rate of 4.8 per cent. However, given there is uncertainty how the transition from lockdowns played out, predictions range for a jobless rate of 4.5 to 4.9 per cent.
Employment is expected to rise by 50,000 in the month, but again forecasts range from a 50,000 fall to an 120,000 rise.
Whatever the case, this would be a fraction of the more than a quarter of a million jobs that had been lost in the previous two months.
Even so, economists at RBA Capital Markets believe a decent recovery in the labour market is currently under way.
“We would expect the job-shedding of the last few months to be fully recouped by early 2022,” they said in a note to clients.
The ABS will also release its weekly payroll jobs report on Wednesday, which may give some hints for Thursday’s full employment report.
Meanwhile, a series of confidence reports for consumers and business are due out over the course of the week – pointers to future household spending and business investment and hiring.
Economists expect these will all have a positive ring to them as NSW, Victoria and the ACT emerged from lockdown.
The weekly ANZ-Roy Morgan consumer confidence index and the monthly National Australia Bank business survey are released on Tuesday.
The Westpac-Melbourne Institute consumer sentiment survey is issued on Wednesday.
Meanwhile, Australian shares look set to a positive start to the week, buoyed by a further rise on Wall Street in response to a strong US payroll report.
The US Labour Department said jobs jumped by a net 531,000 in October, more than 100,000 above economists’ expectations.
The gains were widespread across industries, and the government also revised higher the numbers for job growth in earlier months.
The S&P 500 rose by 17.47 points, or 0.4 per cent, to 4,697.53, clinching an all-time high for the seventh straight day.
The Dow Jones Industrial Average gained 203.72, or 0.6 per cent, to 36,327.95, and the Nasdaq composite added 31.28, or 0.2 per cent, to 15,971.59.
Australian share futures responded by rising 22 points, or 2.9 per cent, to 7459.
On Friday, the Australian benchmark S&P/ASX200 index closed higher by 28.9 points, or 0.39 per cent, to 7456.9.