Australia’s unemployment rate is expected to reach 6.8 per cent in mid-2010, a far cry from the 9 per cent predicted by some analysts earlier this year.
According to Access Economics’ September business outlook, Australia’s job market is more flexible than it has been in past recessions, with people losing hours rather than jobs.
The report also said the Reserve Bank of Australia (RBA) would lift interest rates by 2 percentage points over the next 18 to 24 months, with cash rates reaching 5 per cent by early 2011.
“The economy is slowly returning to normal, and that return to ‘normal’ in the economy means a return to ‘normal’ for interest rates,” the report said.
“Recovery will see underlying inflation back at or above 3 per cent by early 2011. And the economy can expect to see growth in the economy back at 3 per cent – trend – at about the same time.”