RBA Chief Says Unemployment Rate To Rise Further
Australia’s unemployment rate is set to rise further, even with the recovery underway, Reserve Bank of Australia Governor Philip Lowe said Tuesday.
This is because many of the people who lost their jobs over recent times have been classified as not in the labor force and so are not counted as unemployed, he noted.
As the labour market continues to improve, many of these people will start looking for jobs, and thus be classified as rejoining the labor force. This will push up the measured unemployment rate, Lowe observed.
Although the labor market has turned the corner, the path ahead is expected to be bumpy and there are some major cross-currents in the labor market at the moment, he said.
“Looking forward, we should have confidence that the pandemic will pass, either because of scientific breakthroughs or we become better at managing the effects of the virus,” Lowe said.
“Until it does pass, our incomes will be temporarily lower and it makes sense to smooth this out through fiscal support,” he added.
The longer it lasts and the more uncertain things are, the harder it is to smooth out, Lowe added.