Australia's Labor Market Remains Tight Despite Rising Unemployment

On May 21, Jin10 reported that despite a significant rise in Australia's unemployment rate in April, the labor market remains relatively tight. According to Cherelle Murphy, Chief Economist at EY, the underemployment rate of 5.8% is well below pre-pandemic levels, and labor demand appears to remain high, with businesses continuing to report difficulties in finding suitable workers. Murphy added that the Reserve Bank of Australia (RBA) has recently warned that rising gasoline prices could pose a risk of rapid price increases. She noted that the RBA may need to further tighten monetary policy.