Promising Future Ahead for Australia’s Job Market

Over the weekend, Federal Reserve policymakers in the US have signalled they are ready to cut interest rates. According to Reuters, these cuts will take place at the U.S. central bank’s meeting in two weeks’ time due to the cooling US labour market. This is promising news for Australia’s job market as although Reserve Bank Governor Michele Bullock has previously stated cuts are unlikely in the next six months, the US cutting interest rates could put too much pressure on Australia’s Reserve Bank to ignore.

Do lower interest rates impact the job market?

According to the Reserve Bank of Australia, reducing interest rates can lower unemployment across Australia, if the Reserve Bank is willing to accept higher inflation. To simplify it further, when interest rates are low, companies are more willing to spend and expand and this expansion creates more job opportunities. However, when interest rates are high and companies tighten up, this prevents the creation of new jobs.

Inflation around the world has trended down since 2022 and research suggests this is very good news for Australia’s job market. With inflation continuing to trend down, it could mean the Reserve Bank is more likely to cut interest rates and help create more jobs. Although there are no guarantees the Reserve Bank of Australia will follow the US, it should be noted that historically, central banks move their rates together but at different speeds and often with delays. Australia and America’s rates have been following similar behaviours since 2020.

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America & Australia's interest rates since 2020

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Future industry growth

One of the fastest growing industries in Australia’s job market is Healthcare and Social Assistance (https://www.kbs.edu.au/blog/career/fastest-growing-industries-australia). Employment opportunities in this industry are projected to grow by 15.8% according to Jobs and Skills Australia. This puts Healthcare and Social Assistance above the national average growth rate. ?Among this growth includes Aged and Disabled Carers that have a projected employment growth of 28%. Here at Hinchen Recruitment Group, we are excited to see how much this growth will increase if the Reserve Bank of Australia follows the US and cuts interest rates. Whenever new information is published, we will be sure to share it on our page so please follow for more market news in the future.

If you’re working in these growing sectors or are looking to expand your business, reach out to one of our expert consultants today to discuss how we can help meet your employment needs at www.hinchen.com.au