With job vacancies rising, there’s growing demand for labour and positions aren’t being filled, which is a positive sign, ABC News reports.
And job vacancies are surging at the moment.
In February, there were 289,000 vacancies, up 13 per cent in the last three months.
The vast bulk of them were in the private sector (260,300) compared to the public sector (28,400).
Ben Udy, an economist from Capital Economics, says his “composite” measure of vacancies, where he combines the number of job vacancies and skilled vacancies with ANZ’s job ads survey, is sitting at its highest level since the mining boom in 2011.
“Taken at face value, that implies the unemployment rate could dip below 5 per cent by the middle of the year,” he wrote in a note to clients last week.
If the unemployment rate fell below 5 per cent in the next few months it would be a remarkable outcome.
But how likely will that be?
The federal government’s decision to return the JobSeeker unemployment payment to well below the poverty line for hundreds of thousands of Australians, pushing them back into poverty, and to end the JobKeeper wage subsidy last month, will have economic and social consequences.
Economists know what it means for poverty in Australia, but they’re unsure how it will affect the official unemployment rate.
Last month, Steven Kennedy, the secretary to the Federal Treasury, said it could see the unemployment rate rise a little in coming months.
He warned an extra 100,000 to 150,000 people could lose employment, and it could take time for those workers to find jobs and for the unemployment rate to start falling again.
But other economists think there’s enough momentum in the economy for the unemployment rate to keep declining from here.