CBA: High Vacancies To Support Job Gains, RBA Tightening Should Weigh Further Ahead

CBA note that “the labour market is in incredibly strong shape with unemployment at historically low levels. It is likely that the labour market is at or exceeded full-employment. This is an achievement that seemed unlikely during the worst of the pandemic and has proved a positive outcome for the unprecedented level of expansionary fiscal and monetary policy deployed in recent years.”

• “The labour market being this tight does create some issues however, with the demand and supply of labour somewhat mismatched after the structural shock that COVID precipitated. Labour shortages in some industries persist, but with the return of overseas migration, some of these issues are likely to dissipate in 2023.”
• “Further, as financial conditions tighten, a loosening of the labour market is expected.”
• “For now though, job vacancies are high and economic activity remains strong and so we expect an employment gain of 20k in September, keeping the unemployment rate steady at 3.5%.”