Deloitte Access Economics has released its Employment Forecasts for 2024 and 2025, which tips anaemic jobs growth next year alongside a sharp rise in the nation’s unemployment rate.
Specifically, Deloitte forecasts “national employment growth of just 0.5% (75,000 workers) in calendar year 2024, before gradually increasing to 1.3% (177,000 workers) in calendar year 2025”.
In turn, the firm “expect this to be accompanied by an increase in the unemployment rate, forecasting an increase to 4.5% by June 2024”.
As shown in the next chart, 2024 jobs growth will be concentrated in Human services, whereas White collar and Blue collar jobs growth will be very soft:
On Friday, The SMH reported that large numbers of white collar jobs are being lost across finance and professional services:
“According to the Finance Sector Union (FSU), around 3000 jobs have gone across the banking sector in Australia this year”.
“As many as 1000 highly paid employees are being let go this year across the major consulting firms”.
“Deloitte Access Economics forecasts that new hiring in white-collar jobs is now falling off a cliff with just 21,000 white-collar jobs expected to be added in 2024, which would be the weakest growth since 2017. This compares to the 778,800 workers added in 2021 and 2022”.
“We’re expecting the worst quarters to be the December quarter that we’re in now and the March quarter of next year for white-collar jobs,” says Deloitte Access Economics partner David Rumbens”.
“He expects the pullback to be particularly harsh in professional services, finance, education and training”.
Certainly, the latest employment data from SEEK paints a worrying picture as we head into 2024.
Job ads have fallen sharply, which based on historical correlations points to sharply rising unemployment next year:
The same applies when we compare the unemployment rate against the number of applications per job ad:
Given Australia’s labour force is currently growing at a record rate of 2.8% (600,000 people), around 38,000 jobs are needed to be created per month to keep the unemployment rate stable (assuming a steady participation rate):
This will obviously become more difficult as the RBA’s aggressive interest rate hikes bite and the economy slows into a deeper per capita recession.
In turn, Australians should brace for a sharp rise in unemployment in 2024.
