The effect unemployment has on the economy and the growth of it in totality is by far the most economic challenge the Australian nation could experience ever.
From the data gathered from the Australian Bureau of Statistics, Seek, Department of Jobs and Small Business, it shows job ads went so low to 8.4%. Further explanation of this data by ANZ shows that things could get better in June regardless of the fall in May.
Employment Rate Indicators
Now considering the ANZ job ads series, this is primarily meant to profer explanations to the importance of labour force data which is the unemployment rate and the underemployment rate. It was through this data we were able to determine why the unemployment rate remained steady at 5.2% in May, while underemployment had risen.
The explanation given on the steep decline in the job ads series by ANZ was that there are no clear good times ahead in the unemployment market. This, however, do not show a good sign of change on the economy. Many blame this on Easter and others on election and e nation’s retail sector is already in recession, according to the NAB business survey. The price of housing also begins to decline abruptly following the bloom it experienced after the election.
The rise and fall experienced lately by the Australian economy have little explanation for what the ANZ head, David Plank proposed as regarding the June flip. Even what the Reserve Bank of Australia could only do is to begin cutting down the rates so as to record lows.
Contrary to the comments of the RBA earlier this year, on the performance of the labour market, what the Australian has seen is a complete opposite and it is not getting better by the day at all. RBA mentioned that he observed “tension” within the system but do not see anything bad in the labour market but the current data shows that tension has can no more be managed.
Anyways, citizens were sceptical of the RBA observation of “tension” but it was this eminent that the RBA use it to excuse its postponement of rates cut. This, of course, is not an easy task but the RBA had taken time to start putting necessary structures in places to back its decision of rates cuts. He begins by cutting interest rates from the least to the most.
What solutions can be taken?
This movement has been considered by investors both locally and foreign to be unreasonable but what could we have expected in the first place? Rate cuts ahead of an upcoming economic challenge do not seem right in every way but rather destructive to many business setups or organisations.
What the Australian government could do to alleviate these negative economic pull is to enact the tax refund acts primarily for the middle-income earners which are expected to be out later this year. The $1080 tax refund will go a long way in empowering rate of spending and the economy as a whole.