Live Updates: Asia-Pacific Stocks Rise After US Rate Hike, Jay Powell Comments

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Australia’s unemployment rate remained at a nearly 50-year low, with May labor data showing 69,400 full-time jobs were filled during the period.

The jobs data was stronger than expected and, coupled with wage pressure, could bolster the Reserve Bank of Australia’s resolve to implement a 50 basis point rate hike in July to rein in inflation. . RBA Governor Philip Lowe said this week that he expects inflation to reach 7% by the end of 2022, double his expectations at the start of the year.

Falling unemployment was a feature of the election campaign as Scott Morrison’s right-wing outgoing government pointed to the 3.9% rate as a sign of the economy’s strength. Anthony Albanese’s Labor Party, which won May’s election, tempered that view, pointing to low productivity, weak wage growth and high inflation as signs of trouble ahead.

May’s employment data, while significantly better than expected, did not lead to a decline in the overall jobless rate as more people sought to enter the job market. Part-time jobs fell by 8,700, but analysts at ING, the Dutch bank, said that should reverse in the coming months as new job seekers enter the market.

The tight labor market, coupled with the continued spread of the Omicron variant of Covid-19 which has caused absenteeism, has put pressure on businesses short of labour. The Fair Work Commission said this week that the country’s lowest-paid workers would receive a 5.2% pay rise from July by raising the minimum wage.

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