The jobs market and retail sector are deteriorating under the weight of the Reserve Bank’s aggressive interest rate rises and inflation, with figures revealing households are running down their bank deposits to deal with the high cost of living.
Australians spent less in August than they did in November last year, when the Reserve Bank took official interest rates to 2.85 per cent. The cash rate is now at 4.1 per cent. Vacancies peaked at a record 476,900 in May last year, the same month the Reserve Bank started to lift interest rates from their low of 0.1 per cent. They have now fallen by 18.1 per cent.The health sector, the nation’s largest employer, continues to post the most job vacancies, with more than 68,000 positions needing to be filled. Total health-related vacancies are little changed from where they were in May last year.
As job vacancies decline and retail spending falls, consumers are now digging into their savings to make ends meet. “Elevated cost-of-living pressures and higher interest rates are putting pressure on household budgets and households have had to dip into deposits,” he said.