Are We Finally Seeing Job Growth? Rates Relief Could Change Everything in 2025
The Australian jobs market update is crucial as interest rates may finally ease, impacting households and businesses in 2025.
Australia, Jobs, Interest Rates, Economy, Inflation
Canberra: There’s a lot of buzz about the Australian jobs market right now. An update is coming soon, and it could really shake things up ahead of a big interest rate meeting in February.
The Reserve Bank of Australia hinted at possibly lowering rates after their December meeting. This is a big deal because it could mean relief for many folks in 2025.
We just got the November labor numbers, and they show the jobless rate stuck at 4.1% for two months. But here’s the kicker: the 15,900 new jobs created were below what everyone expected.
Westpac economists think the job market is slowly unwinding. They predict the unemployment rate might tick up to 4.2% and only about 20,000 new jobs in November.
The RBA is being cautious, noting the job market’s strength. They want to see more progress on inflation before making any cuts.
Ivan Colhoun, a chief economist, mentioned that the outlook for households and businesses will stay tough until the RBA gives some rate relief. It was thought that cuts wouldn’t happen until May 2025, but now there’s a chance for February if the data supports it.
Interestingly, a recent report showed insolvencies are at record highs, up 57% this year. Colhoun believes that while rate cuts would help, the easing cycle will be shallow.
He warned that businesses and consumers will still have to deal with high costs for a while. This is reflected in rising payment defaults and increased enforcement from the ATO, which could lead to even more insolvencies.