Jobs data to reveal first signs of Iran war impact
Unemployment data for March will be the first glimpse of how the Middle East conflict is affecting the economy more broadly.
FRESH jobs figures will be an early indicator of how Australia’s economy is faring during the Iran war as a report point to positive signs for government finances.
Labour force figures for March will be released on Thursday by the Australian Bureau of Statistics, the first full month of data since the Iran conflict started and the oil trade was disrupted with the closure of the Strait of Hormuz.
Economists are tipping unemployment to remain at 4.3 per cent, despite the number of jobs growing by 25,000 for the month.
Westpac economist Ryan Wells said the data was significant as it would be the first drop that aligned with the war, but it could still be too early to tell the full impact of the conflict.
“It is almost certainly too early for flow-on effects from this shock or from recent interest rate rises to be showing through in labour markets,” he said.
“Changes in non-fuel spending is still evolving – discretionary services spending has softened, largely in accommodation and recreation, but there are no real signs of weakness in discretionary goods spending.”
The previous month’s figures showed a surprise jump in unemployment from 4.1 to 4.3 per cent, due to fewer unemployed people waiting to start a new job in February than in the same period in previous years.
It comes as an International Monetary Fund fiscal monitor report found that Australia’s budget balance was among the three strongest in the G20.
The report said the balance as a share of GDP was ahead of that of countries such as the US, the UK, Germany and Japan, while the nation had the fifth-lowest debt relative to economic output.
“The commonwealth has built a strong fiscal position that can help buffer future fiscal headwinds,” it said.
The findings coincide with Treasurer Jim Chalmers holding talks in Washington for the IMF-World Bank spring meetings, along with his counterparts from the UK, China and Japan.
The IMF has warned of a global recession if the situation in the Middle East does not abate.
Dr Chalmers said the government’s financial ranking was an outstanding result.
“We’re not immune from global volatility as a result of the conflict in the Middle East but thanks to the progress we’ve made in the budget, we’re well placed to confront it,” he said.
