The latest Queensland Investment Corporation (QIC) economic note showed that economists widely predict a fall in the number of people unemployed ahead of the official release by the Australian Bureau of Statistics (ABS) on Thursday.
The QIC estimates that employment will be lifted by around 0.4 per cent in December, meaning 50,000 Australians will be in work, seeing the unemployment rate dip further to 6.7 per cent.
“The resilience of Australia’s labour market in 2020, combined with significant fiscal measures, helped to prop up Australian households’ incomes in the face of pandemic lockdowns, which in turn allowed household consumption to drive Australia’s economic recovery,” the QIC said.
Recent strong vacancy and job advertising figures suggest the labour market should see further strength in coming months with the number of job vacancies rising to pre-COVID levels.
The ABS has revealed that the number of job vacancies in Australia increased by 23 per cent over the November 2020 quarter. On an annual basis, job vacancies were 12 per cent higher than November 2019.
ABS head of labour statistics Bjorn Jarvis said job vacancies rose by 48,000 in the November 2020 quarter, following a sharp rise of 77,000 in August as the COVID-related restrictions were eased across Australia.
“There were 254,000 job vacancies in November, which was higher than the pre-COVID level in February,” Mr Jarvis explained.
However, a gain in employment is unlikely to see household incomes rise, with government stimulus packages ending in March 2021.
“Despite the employment gains, household income will nonetheless be under pressure as other fiscal measures roll off.”
“However, the worst of this has already passed, with households having already faced a sharp cut to the JobSeeker coronavirus supplement and the cessation of the government’s $750 cash payments in the fourth quarter of 2020. In fact, we estimate that the reduction of fiscal measures likely resulted in a fall in household disposable income of as much as 4 per cent (almost $20 billion) in 2020Q4,” the economist concluded.
