Financial markets have increased the chances of an interest rate cut later this year after a jump in the unemployment rate. The rise is being put down to high migration and more people joining the workforce to look for a job.
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00:00Business at this bar is down. The owner is trying to shake things up, but customers keep
00:08talking about cost of living pressures.
00:10There you go guys.
00:11Thank you.
00:12Thank you.
00:13People are going out a bit less, people are spending less, people are staying longer,
00:18and they're not ordering as much.
00:20That means Ben Newman can't give his casual staff as many hours as they want.
00:25We might close early on a certain day, but we might not be able to keep an extra one
00:29or two on that we otherwise might have.
00:32Despite nearly 400,000 more people in jobs, fewer hours are being worked compared to this
00:38time last year. That's pushed up the underemployment rate, where employees aren't working as much
00:43as they'd like. Competition for jobs is also heating up, and more people are looking
00:48for work, boosting the participation rate. That's led to an increase in the unemployment
00:54rate to 4.1 per cent.
00:56Economist Bessa Dedder says the jump in the jobless rate is reflective of a growing population
01:02with migrants among those looking for work.
01:05I think by the end of this year we will see an unemployment rate that's closer to 4.5
01:10per cent.
01:11The RBA assistant governor says the Reserve Bank is mindful of the pressure higher interest
01:16rates are putting on households.
01:18We don't discount the challenge that this has been for some people through the last
01:22little while.
01:23The latest jobs numbers are another sign that the Reserve Bank's attempts to slow
01:27down the economy are working. Financial markets now believe there's a strong chance of a
01:33rate cut by the end of this year, a view that's also shared by most economists.
01:38The next move from the Reserve Bank will be down. We have the timing as November for the
01:45first rate cut, which will be a quarter of a per cent rate cut, following that up with
01:50three more rate cuts over 2025.
01:53Until then, the drinks at the bar aren't overflowing like they used to.