The Reserve Bank of Australia (RBA) has announced that the economic impact from the discontinuation of JobKeeper will be manageable and will only have a minor impact on employment but it is unlikely to slow employment growth cross Australia. The statement was included in RBA’s newly published quarterly monetary policy update.
The policy update was published on Friday 7th May, outlines that it is projecting that employment growth will continue to evolve over the next few months but it can be a slow employment growth. The central bank expects the impacts of JobKeeper’s expiry will have only a “muted effect” on Australian employment figures through 2021, despite many people originally expecting the end of JobKeeper to destabilise Australia’s recovery from the covid-19 pandemic.
“Employment growth is expected to remain strong over the next few months given solid momentum in activity and buoyant forward indicators of labor demand suggesting a muted effect from the end of the JobKeeper program,” the RBA said.
The RBA’s latest report revealed a revised unemployment forecast, down from its February estimate of 6.5 percent to 5.25 percent. This suggests that Australia could reach full employment by the end of 2022.
The total hours worked has also returned to the same levels that were recorded prior to the covid-19 pandemic. These figures are also illustrating hat there is a big increase in full-time employment across the country.
The recorded level of employment and hours worked in March 2021 were both higher than the levels recorded in March 2020. Employment was up by 0.6 percent and hours worked was up by 1.2 percent.
The data also illustrates that last month 62.6 percent of people over the age of 15 were employed, which is higher than March 2020 which was recorded at 62.4 percent.
The percentage of women employed is also the highest it’s ever been sitting at 58.5 per cent. This is half a percentage point higher than in March 2020. The latest figures illustrated that the percentage of men employed remained slightly lower than before the pandemic 66.8 percent, compared with 67.0 per cent in March 2020.
The number exceeded expectations for a 35,000 to 45,000 increase in jobs for the month.
The current unemployment rate is higher than it was twelve months ago, but this is mainly due to the fact that more people are looking for work, with participation around record highs at 66.3 percent.
The figures from March remain high following an increase of 89,000 new jobs added during the month of February 2021. Of these 89,000 a total of 69,000 were women.
Australia’s jobs market is recovering 4.5 times quicker than the experience of the labour marketing during the 1990’s recession.
Data revealed that a total of 13,077,600 Australians are employed as of March 2021. Unemployment has decreased by 27,000 since the end of February.
The Treasury has said that, while early figures make a case for optimism, they don’t fully capture the state of employment following the withdrawal of the government’s wage subsidy, which the Treasury forecast would subject up to 150,000 people to unemployment and slow the employment growth.
“Now, we will see the full impact of the end of JobKeeper over the course of the coming months. But in some of the early data that we are seeing, we are not experiencing a massive increase in people turning up to Centrelink” said The Treasury.