The jobs market appears to be starting to cool as a swathe of interest rate rises pumps the brakes on the economy.
The Reserve Bank said in its latest board meeting minutes while the official jobless rate remained around 3.5 per cent, there were some signs “the labour market was at a turning point”.
The board noted a small rise in the underemployment rate, forecasting the unemployment rate to hit 4.5 per cent by late 2024.
More light will be shed on the jobs turnaround when the latest official labour force data is released on Thursday.
CommSec chief economist Craig James said it appeared the Reserve Bank is now comfortable inflation is heading in the right direction and won’t hike the cash rate beyond the current 4.1 per cent.
A softer than expected labour market could see the RBA starting to cut rates earlier than the first quarter of 2024, he said.
Treasurer Jim Chalmers seized on new wages data which in the June quarter was line-ball with inflation – the first time wages had not retreated in real terms in three years.
The Australian Bureau of Statistics reported wages increased 0.8 per cent in the quarter, and 3.6 per cent annually.
“We’re seeing inflation moderate at the same time as wages are growing and on both fronts that’s a good thing,” Dr Chalmers said.
Opposition workplace spokeswoman Michaelia Cash told AAP the Labor government had delivered real wages going backwards, interest rates rising and cost of living pressures hurting millions of Australians.
“Labor needs to focus on policies which encourage jobs growth and improve productivity in our economy, but instead they are only focused on policies which reward their union mates,” she said.
“Labor needs to stop taking for granted the strong labour market left for them by the former coalition government, where unemployment was at its lowest point in nearly 50 years.”