The coronavirus epidemic has caused headlines in the Australian economy, including the labor market. However, one expert said it could be "misleading" to try to predict what would happen in the job market under current conditions.
[Craig9002] Craig James, chief economist at CommSec, said the job market was in good shape before the coronavirus hit the market earlier this month.
"The impact of the virus in February was largely on businesses and regions dependent on tourism, as well as on the education sector. However, data on employment in February would also have incorporated the effects of the bush fires that affected so many parts of the country. ", he said.
Figures from the Australian Bureau of Statistics show a drop in the unemployment rate from 5.29% to 5.10%. In contrast, employment increased by 26,000 jobs during the month.
"Employment data for February – just like the retail figures – were indeed encouraging," said James.
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Another positive point of the month was the drop in the unemployment rate of women workers to its lowest level in 11 years. Tasmania's unemployment rate also hit its lowest level in more than 8 years.
Since these data did not take into account the impacts of the COVID-19 epidemic, James said that the outlook remains difficult.
"The job market has entered the virus crisis in a reasonable form. Yet the Reserve Bank would no doubt conclude that an unemployment rate of 5.1% is good, but not great" , he said.
James said that help from federal and state governments to support business and the economy as a whole will be crucial to ensuring that the unemployment rate remains under control.
Some experts are already expecting the unemployment rate to deteriorate in the coming months. Bill Evans, chief economist at Westpac, said Australia could lose 814,000 jobs, with unemployment reaching 11.1% in June.
"Although our central view is that the peak of new cases will occur in the June quarter, we expect the" recovery "in the September quarter to be slow. Most closure policies will still be in place before the September quarter and will only relax gradually during the quarter, "he said.
In a separate analysis, Shane Oliver, chief economist at AMP Capital, said that the impact of the COVID-19 epidemic on the unemployment rate in Australia would likely influence the price movement of housing.
"Our basic scenario is for an increase in unemployment to around 7.5%, which should cause prices to drop by around 5% before a recovery in the property market in next year then that the economy is rebounding and pent-up demand is unleashed once again helped by extremely low interest rates, "he said in a position paper.
According to James, however, it could be misleading to project into the current climate.
"It is pointless – and may even be misleading – to try to forecast in the current environment. It will depend on how quickly active coronavirus cases peak in Australia , the aggressiveness of state and federal governments to support business and how rapidly vaccines and treatments are being developed to treat COVID-19, "he said.
In addition, James said that no one should underestimate the resilience of the Australian economy.
"Australia has not experienced a recession for 28 years, despite all kinds of shocks, including the global financial crisis. And although it is more difficult to avoid a recession this time, our economy should also rebound quickly, "he said.
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