Unemployment to rise further, Chalmers says, as Trump 'volatility' weighs on employers
"When it comes to this tick up in unemployment, it is modest, it is unwelcome, but it's also unsurprising."
He said cost-of-living pressures, coupled with high interest rates, had resulted in a small lift, but overall, the economy "kept ticking over," unlike other countries. Asked whether Treasury anticipated unemployment would rise as high as 5 per cent, he said not quite. "We're not expecting unemployment to go that high. We think somewhere around the middle floors in our current forecast, but obviously there's a lot of uncertainty in that," Chalmers said. However, signs of a tougher jobs market could help set the scene for lower interest rates in the months ahead.
Ex-Reserve Bank of Australia economist Luke Hartigan said the June outcome met the central bank's year-end unemployment forecast.
"This just adds information to say that some modest reduction in interest rates is warranted," the University of Sydney economics lecturer told the Australian Associated Press. Trump tariffs weighing on employers' minds globally Asked if he believed the policy uncertainty was affecting decisions on whether to hire workers, Chalmers said: "That's certainly the feedback that we get around the place, speaking with CEOs and meeting with company boards. "There is a real sense that this volatility and unpredictability and uncertainty is really a defining and an ongoing feature of the global economy." Over the weekend, Trump announced a 30 per cent tariff on major trading partners Mexico and the European Union, set to kick in on 1 August. Chalmers said the "new normal" requires a "shift" in thinking, with "more collaboration, more secure supply chains and more reliable markets" the best pathway forward. With additional reporting by the Australian Associated Press.
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