Rising jobless rate
Does the rising jobless rate mean a rate rise freeze? Australia’s unemployment rate unexpectedly rose to 5.3% in July, prompting many industry insiders to downgrade any chance of an official interest rate rise until 2011.
Most analysts had predicted the jobless rate to stay steady at 5.1%, where it remained in both May and June. In the month of July, the Australian Bureau of Statistics (ABS) reported that companies across the nation added 27,700 part-time positions, and shed 4,200 full-time jobs – the first decline in almost 12 months.
The ABS data has been received by property market pundits who suggest that the data will cause the Reserve Bank to pause on interest rates. They have been proved right at least to the extent that minutes resealed from the most recent Reserve Bank board meeting shows that rates may be on hold for the rest of the calendar year. Thus, while the unemployment news may not be particularly great news for job seekers, it does paint a positive picture for mortgage holders.
Moreover, trend inflation is falling neatly back into the Reserve Bank’s 2-3% band. But there is no guarantee that banks and lenders won’t increase interest rates independently of the Reserve Bank. The news however is supportive for mortgage refinancing and for people who may be able to find competitive deals amongst mortgage providers which may be keen to meet demand in mortgage refinancing.
Melissa Shoaf says:
December 8th, 2010 at 3:21 am
No longer a new issue — but never fails to surprise and make everyone nervous. It’s happening in diff parts of the world. 5.1 % is a pretty high rate. Sure it helps a lot to find refinancing deals… but a little job alongside —not the typical 8-5 office work — may help as well.