Unemployment plunges to just 5.8% – but the lowest jobless rate since the start of the Covid pandemic is BAD news if you’ve got a home loan
- Australia’s jobless rate plunged from 6.3 per cent to 5.8 per cent in February
- This occurred as 88,700 new jobs were created in just one month nationally
Australia’s jobless rate has plunged to just 5.8 per cent – stirring fears record-low interest rates may be raised sooner.
The level of unemployment in February dived from a revised 6.3 per cent in January, as 88,700 new jobs were created, the Australian Bureau of Statistics revealed on Thursday.
Unemployment is now at the lowest rate since the declaration of a Covid pandemic in March 2020 which led to shutdowns of service-sector jobs, the first recession in 29 years and the deepest economic decline since the 1930s Great Depression.
Just before the Covid shutdowns, a year ago, the jobless rate stood at 5.2 per cent before rising to 6.4 per cent in April 2020.
Australia’s jobless rate has plunged to just 5.8 per cent – stirring fears record-low interest rates may be raised sooner
By July 2020, unemployment hit a 22-year high of 7.5 per cent as more than one million Australians were officially unemployed for the first time ever.
Since then, the jobless rate has kept falling with 805,200 people without work in February, a monthly decline of 69,900.
The good news has been delivered just ten days before the end of $1,000 a fortnight JobKeeper wage subsidies for those putting in 20 hours a week or more.
Part-time workers clocking on for less than will also lose their $650 fortnightly wage subsidies after March 28.
While the unemployment drop is a relief, it is also bad new for those with a home loan.
The Reserve Bank of Australia in November cut interest rates to a record-low of 0.1 per cent.
The level of unemployment in February dived from a revised 6.3 per cent in January, as 88,700 new jobs were created, the Australian Bureau of Statistics revealed on Thursday. Pictured is a Melbourne cafe
Governor Philip Lowe has repeatedly promised the cash rate will stay at that level until at least 2024, predicting it would take that long for unemployment to fall back to 5 per cent.
Australia’s inflation rate of 0.9 per cent is well below the RBA’s 2 to 3 per cent target but lower unemployment traditionally causes wage pressures.
Economists and policymakers focus on a measure known as the non-accelerating inflationary rate of unemployment.
Last month, 13,006,900 people had a job, just 1,800 less than the 13,008,700 employed in February 2020, the last full month before the Covid shutdowns.