Economists forecast Australian June unemployment rate of 5.8%

Australia’s unemployment rate of 5.7 percent in May is expected to rise to 5.8 percent in June, economists predict. The official unemployment report will be released on Thursday, July 14.

Business Insider reports that a modest gain of 10,000 new jobs would be reported but noted the unemployment report’s credibility has “severely waned” the past 18 months. The 0.1 percent expected rise in joblessness breaks three months of stability which is the lowest level of unemployment in almost three years.

AAP attributes the expected hike in unemployment to the election campaign “spruiking” the government’s economic plan for jobs and growth. A 5.8 percent unemployment rate would add to the bad economic news that would greet the re-elected Turnbull government.

In mid-June, Jobs Australia recommended the adoption of a universal unemployment insurance scheme. The report pointed out, “We have insured against old age, illness, workplace injury, and disability … It is logical that we now similarly insure against the periods of unemployment or intervals between particular paid jobs, and for the periods of reskilling, which will increasingly be part of our future economic disruption,” quotes Sydney Morning Herald.

The proposed scheme would be funded by employee, government and employer contributions. Deakin University Professor Andrew Scott, author of the report, said if the premium would be shouldered by employees alone, it would range between 0.4 and 1.5 percent of adult average weekly ordinary time earnings, or $6 and $22 weekly.

The interest rate cut in May failed to boost household spending, while consumer confidence went down and trade deficit widened. Also last week, rating agency Standard & Poor’s changed its rating outlook for Australia from “stable” to “negative” which places at risk the country’s AAA rating.

A rating downgrade would make borrowing more expense for government, business and banks which in the end could flow to consumers.

However, on the positive side, the Australian dollar opened higher on Monday morning at 0.7559, up 3.5 percent. ASX futures are also expected to rally at around 170 points.

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