The days of ultra-low unemployment are coming to an end in Australia. Here’s why.
Australia’s labour force is now growing at a record pace thanks to the Albanese Government’s unprecedented immigration program.
As illustrated in the next chart, Australia’s civilian population aged over 15 years grew by a 598,000 in the year to July, or by 2.8%:
That rate of labour supply growth is around twice as fast as the years leading up to the pandemic, whereby the 15-plus civilian population typically grew by around 300,000 per year.
At the same time, labour demand is slowing, as shown in the next chart from AMP chief economist Shane Oliver:
The Reserve Bank of Australia’s (RBA) interest rate hikes are slowing demand across the economy, which is stifling jobs growth.
AMP’s Jobs leading indicator (green line above) is also pointing to further slowing.
The combination of strong labour supply growth (via immigration) and slowing demand has lifted the number of applicants per job, which signals rising unemployment:
According to CBA’s economics team, Australia now needs to create around 35,000 jobs per month just to keep the unemployment rate steady:
That will be an impossible task given current monetary and fiscal policy settings.
The end result will be rising unemployment and lower wage growth, courtesy of the Albanese Government’s extreme immigration policy.
I explained these forces in Friday’s interview with Sky News (video below):
“Over the next 12 months, we’re going to have huge numbers of people coming in and the jobs growth just isn’t going to be there to soak them all up. And that means unemployment is going to rise and that’s going to also put downward pressure on wages”.
“It’s obviously really bad news if you’re a worker because you’re obviously going to get lower wage growth and if you’re unemployed you’re going to struggle to get a job”.
“But the one shining light is if you’re a mortgage holder. It means that interest rates are almost certain to stay on hold”.
Basically, Albo from the Projects is doing his best to undermine working class Australians, while looking after his growth lobby mates.
