Gold stocks soared on Monday, as investors saw the unemployment rate fall below zero in Australia, as a new report showed the economy is on track to expand at its fastest pace in over a decade.
The Australian Bureau of Statistics said on Monday that the unemployment gap was down to just 0.2 percentage points, with the unemployment at 5.4 per cent now the lowest in the G7.
The figures come as Australia is facing an economic slowdown amid a weak global economy, a worsening housing crisis and rising public debt.
The unemployment rate has now been at the lowest level in over 20 years, with a recent increase seen as a temporary blip after a fall of more than two percentage points in September.
The BIS has been watching the labour market closely since the Australian Bureau and Australian Institute of Health and Welfare (AIHW) predicted a rise in the unemployment figure this year.
A low unemployment rate is considered a strong indicator of the economy, and it was used to guide the Federal Government’s decision to increase the budget deficit and boost the economy.
The data shows that the employment gap has dropped from 6.9 per cent to 5.9 percent, with employment increasing by 0.6 percentage points over the past year.
In the month to September, the employment rate fell by 0% in the mining sector, from 9.4% to 8.4%.
In the services sector, the number of vacancies fell from 7.6% to 6.7%.
In total, the unemployment in the housing sector has dropped by 3.2 per cent.
“The recent low unemployment is likely to be temporary and the labour-market outlook remains very good, particularly in the construction and manufacturing sectors,” the ABS said.
“We expect the unemployment to rise in a gradual way over the next few years, driven by a stronger global economy and lower levels of debt.”
In the short term, however, this could see the unemployment rise faster than in the past, and we expect this to be reflected in GDP growth in the longer term.
“The unemployment gap is also expected to rise next year, with wages expected to grow by 0,7 per cent in the year ahead.
However, the ABS warned that there are a number of factors to consider in terms of the long-term outlook for the economy: the Federal Budget will be lower than expected, with some analysts expecting a $2.4 billion cut to public services.
However, economists have been predicting a $1.5 billion cut in the Budget, but the ABS has pointed out that this is the lowest that the government has been willing to go.
The latest report also shows that households are still on track for a surplus, and that the average household is expected to have an annual income of $1,100 by 2020.
While this will be the lowest income of the G8, it is the second highest in the world, behind Australia.
The ABS said the average income for households in Australia is expected increase by 2.5 per cent over the coming year, compared to a 6.6 per cent increase in households in the UK.
Topics:economy-and-finance,government-and‑politics,industry,employment,people,jobs,wealth-and.coast-2150,australia,act,brisbane-4000,southport-4215First posted January 08, 2020 12:39:21Contact Emily EganMore stories from South Australia