The past year has been unlike any other for Australia’s jobs market, which heads into 2024 in a position of historic strength despite the creeping effects of higher interest rates starting to soften conditions.
Unemployment sat within a tiny 0.2 percentage point window for most of the year between 3.5 per cent and 3.7 per cent, before rising to 3.9 per cent in November in what could be a sign of what’s to come for workers.
On the one hand, that’s a run of remarkable stability made even more surprising by economic upheaval elsewhere as rates have increased.
But the upwards trajectory in the jobless rate heading into 2024 is also an ominous sign that the financial pain engineered by the Reserve Bank has begun to slam the brakes on the jobs market – albeit gradually.
It all begs important questions for workers; How far will unemployment rise in 2024? And does that mean job losses, or just fewer new jobs?
Leading economists are predicting the latter will be the case and that Australia’s jobs market will undergo an orderly softening next year, with jobs growth to continue slowing and participation to remain very high.
All else equal, that means higher unemployment, but as University of Melbourne professor Jeff Borland explained, a spike in layoffs is unlikely.
“What you’re most likely talking about is a continued slowing of employment and jobs growth,” Borland said.
“I don’t think we’re talking about a sustained period of negative employment growth.”
Indeed APAC economist Callam Pickering outlined a similar view, saying workers shouldn’t expect jobs market conditions to plunge significantly.
Some perspective is useful here – while unemployment is set to rise and jobs growth is slowing, vacancies remain at historically strong levels.
That will help workers who are looking to move jobs or find themselves between roles in coming months, with plenty of opportunities available.
“There remains incredibly strong demand for workers across the nation,” Pickering said.
Unemployment rising
As things stand the Reserve Bank predicts unemployment will rise to 4 per cent by June and then to 4.2 per cent by the end of 2024.
Employment growth of 3.3 percentage points is tipped over that period.
(thenewdaily.com.au)
