Rate rises hit the jobs market as ‘help wanted’ signs disappear

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The Reserve Bank has said it wants to bring down inflation and keep the jobless rate as low as possible. Now job vacancies are starting to fall sharply.

Job vacancies dropped by 2.7 per cent in the May quarter.The Reserve Bank has fresh evidence its high official interest rates are hitting the jobs market after a further fall in vacancies across the country and a slowdown in advertised salary growth.at the RBA’s next meeting in August, new data from the Australian Bureau of Statistics revealed job vacancies dropped by 2.7 per cent in the May quarter.

The bank, while seeking to bring inflation down to its 2-3 per cent target, has also repeatedly noted it wants to keep unemployment as low as possible.Capital Economics chief Asia-Pacific economist Marcel Thieliant said the figures suggested the job market was souring. “As the labour market softens, advertised salary growth is expected to ease, which it has done since September last year, where it peaked at 4.9 per cent year-on-year,” he said. “The steady month-on-month results this year point to the annual rate continuing to moderate in the coming months.”monthly inflation climbing to an annual rate of 4 per cent in May, from 3.6 per cent in April. Financial markets now put the chance of an interest rate rise at the RBA’s August meeting at 50:50.

“That’s why all of our cost-of-living measures are designed in a way to assist the economy and lowering inflation.”

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