Australia's labour market stays strong in face of COVID lockdowns

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Australian job advertisements extended their record-breaking run in June as demand for labour remained strong despite a round of coronavirus lockdowns across the country, a sign any drag on the economy will likely be fleeting.

Other data out on Monday showed retail sales topped forecasts in May with a rise of 0.4%, while sales of new vehicles held firm in June, in a promising omen for consumption.

"Recent history shows that workers laid off or stood down during lockdowns tend to be reinstated or find new jobs quickly once restrictions lift, given the underlying strength in the labour market and overall demand," said ANZ senior economist Catherine Birch. "Vacancies are twice their pre-pandemic level, and there are now 1.9 unemployed people per vacancy, easily the lowest ratio on record," said Birch. "This suggests the unemployment rate has a lot further to fall."

The Reserve Bank of Australia is aiming to drive unemployment down to 4% or even lower in the hope of finally lifting wage growth and inflation after years of tepid gains.

 

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