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The Australian economy grew at one of its worst rates with unemployment expected to peak, according to a new report.
The Reserve Bank has tried to rein in inflation, which currently sits at 3.6 per cent, with two years of rate hikes but that has seemingly come at a cost to jobs and growth.
Deloitte’s employment forecasts report has found the economy is stagnating, after it saw the slowest growth since the early 1990s recession.
The report said the poor growth was increasingly evident through GDP, retail spending and the number of business insolvencies.
Deloitte Access Economics partner David Rumbens said the weak economy has finally bled through to the labour market through private sector hiring freeze.
He said “the private sector engine room of the economy has been sitting idle for a while”.
The firm forecasts unemployment, which is at 4.2 per cent, to peak at 4.5 per cent.
That will then leave 101,500 more Australians unemployed in this new financial year.
The retail industry, which was the worst in the 2023-24 financial year with employment falling by 0.8 per cent, is expected to fall another two per cent this year.
The finance industry is also expected to drop by a further 3 per cent before returning to a more stable path.
There are also added weaknesses in parts of the labour market with vacancies, job mobility, a decreased number of average working hours and rising job security fears.
Deloitte expects employment to grow by a weak one per cent this year, down by 2.1 per cent from the previous financial year.
There are, however, some signs that economic conditions may start to improve.
“But the labour market tends to be more of a lagging indicator, trailing broader economic performance by around six months,” Rumbens said.
“That means the labour market may continue to get worse with unemployment rising at the same time economic green shoots are appearing elsewhere.”
