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Red hot jobs market adds to chances of another rate hike

Business

Queensland’s unemployment has fallen to 4 per cent after more than 46,000 jobs were created last month in the state, according to the Australian Bureau of Statistics.

 

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Nationally, unemployment stayed at 3.9 per cent which will add to the case for the Reserve Bank to life interest rates by another 0.5 per cent in July.

The result in Queensland was really a restatement of the level achieved in March, but this time the participation rate in Queensland is at 67.2, the highest level since 2011.

That means that not only were more jobs created but people were also coming back into the labour market.

It prompted Treasurer Cameron Dick to declare Queensland was responsible for three out of every four jobs created in May.

“In a single month, 46,600 jobs were created in Queensland, the equivalent of the entire population of the Scenic Rim,” he said.

Australia’s underutilisation, which measures unemployment and under-employment, was at its lowest level in 40 years.

 

“This continued strength in the labour market supports our view that the RBA will hike the cash rate a further 50 basis points in July,” the ANZ economics team said.

“We are forecasting the unemployment rate to decline through 2022, reaching 3.3 per cent by the end of the year.”

Adding to the impetus for a rate rise was household consumption which remained strong despite falls in consumer confidence, which were at recession-like lows.

ANZ said the strong jobs figures would delay and reduce the pullback of household spending amid rising rates and inflation.

“Though there will be a pullback in consumption as rates rise, we expect consumption to outperform GDP from now until 2024,” the bank said.

Queensland Treasurer Cameron Dick said the state created three out of every four Australian jobs in the month.

“Not only that, but we created those jobs as the number of people looking for work was rising,” he said.

“Queensland’s participation rate of 67.2 per cent is the highest in eastern Australia.

“This is yet more evidence of how important a strong health system and better services are to strong economic performance, and in next week’s State Budget we will strengthen those public services even further.”

 

 

 

 

 

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