CANBERRA, AAP – The federal opposition hopes a recession can be avoided with many economists predicting a sharp economic contraction in the September quarter as a result of mass lockdowns trying to suppress the Delta variant.
New figures on Thursday are expected to reflect the initial impact of the third wave of coronavirus infections which have resulted in a lengthy lockdown in NSW, and similar action taken by other states and territories in recent weeks.
“Obviously, we desperately hope that we can avoid the second recession in two years,” shadow treasurer Jim Chalmers told Sky News on Thursday.
“I think the fact that the Treasurer himself cannot rule out another recession under this Government is another indication of their failures on vaccines, and purpose-built quarantine, and JobKeeper as well.”
Asked on Wednesday if Australia can avoid another recession, Prime Minister Scott Morrison told reporters he remained confident that once the country is vaccinated and can be opened up again, the economy will rebound.
Economists expect the latest jobs figures for July published by the Australian Bureau of Statistics will show a rise in the unemployment rate, which is likely to be the first of several in coming months.
Forecasts centre on a rise in the jobless rate to five per cent from the decade low of 4.9 per cent reached in June.
If correct, it will be the first monthly increase since October last year when the rate stood at 6.9 per cent.
Economists expect the unemployment rate could reach 5.5 per cent in coming months as a result of contraction in the economy.
However, there is some uncertainty over how large the impact from the restrictions will have been in July, given states and territories have been in and out of lockdowns, apart from NSW.
Forecasts range from an unemployment rate rise to 5.2 per cent to an optimistic prediction of a fall to 4.5 per cent.
Similarly, while the number of people employed is expected to fall by around 46,000 in the month, forecasts range from a 90,000 fall to a 20,000 rise.
There have been early warning signs of a slowdown in employment growth with job advertising coming off the boil.
The National Skills Commission’s final vacancy report for July confirmed job advertisements posted on the internet fell three per cent in the month, a second consecutive monthly decline.
The largest fall in the month was in NSW, dropping 10.3 per cent.