The labour market remains tight, and the Australian Bureau of Statistics will release its January jobs data on Thursday. The unemployment rate was at an all-time low of 3.5 percent in December, and the Reserve Bank’s ninth interest rate hike last week was a result of the relationship between the tight labour market and higher wages. St George economist Jameson Coombs noted that there is little slack left in the labour market, which is causing employment growth to de-accelerate and become more volatile. The data will be closely watched by the bank to see how quickly the labour supply is expanding.
The anticipated influx of migrants is expected to help businesses fill some of their empty roles, and Coombs believes that this will lead to strong employment growth early in 2023. However, as labour supply begins to outpace demand, the unemployment rate is expected to rise towards more sustainable levels.