Latest data also shows unemployment at highest level since the pandemic, which analysts doubt will stop RBA hiking interest rates
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Australians are “scrambling” to find more work to cover soaring living expenses and prepare for higher mortgage costs, economists say, after new data showed unemployment ticked up to its highest rate since the pandemic.
The key jobless figure lifted to 4.6% in August, from 4.5% the month before, according to the Australian Bureau of Statistics.
Analysts had predicted unemployment to remain steady, but said the unexpected increase would not be enough to stop the Reserve Bank from hitting mortgage holders with a fourth interest rate hike next Tuesday.
If raised – as is widely expected – the RBA’s cash rate will go from 4.35% to 4.6% – its highest in nearly 15 years.
Central bank officials over recent days and weeks have repeatedly warned that inflation, at 3.5%, remains too high and does not appear to be tracking lower, as hoped.
As higher fuel costs threaten to add to price pressures amid the ongoing US-Israel war on Iran, experts and the financial markets are predicting a good chance the central bank could hike again on Melbourne Cup day.
Details in the labour force data showed the number of employed people jumped by 39,000 last month, but that this reflected a surge in part-time employment, offset by a 6,000-person drop in full-time work.
The lift in the unemployment rate, despite the rise in employment, reflected an influx of new people looking for work, analysts said.
KPMG’s chief economist, Brendan Rynne, said the numbers reaffirmed that the economy is weak and growing weaker.
“Households are still feeling the pinch of higher inflation and anticipatory higher mortgage rates which can be seen through a rise in the participation rate to just below all-time peak level of 67.2%,” Rynne said.
“This suggests households are scrambling to find more income to help cover their rising day-to-day expenses and future increases in mortgage payments.”
Earlier this month, ABS figures showed the number of Australians working more than one job had passed 1 million for the first time.
The share of employed people working more than one job pushed to an all-time high of 6.9%, or about 1 percentage point higher than before the start of the new inflationary era from 2022.
Ryan Wells, a Westpac economist, said “while a softer economy and sub-par employment growth would typically discourage some individuals in their search for work, cost-of-living pressures and interest rate rises are acting as a counterweight, encouraging more people into the labour market”.
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