Analysis of Australian Labor Market: Public vs Private Sector Employment Growth

Tuesday, 2 April 2024, 02:23
The Australian Financial Review reports findings from investment bank Jarden, revealing that the growth in public sector employment, particularly in NDIS-related sub-industries, has masked the slowdown in demand-sensitive areas of the private sector. Without the jobs growth in NDIS-related sectors, the unemployment rate would be significantly higher, showcasing the vital support this program provides to the labor market and economy. As government spending influences the labor market, potential stagflation looms for Australia, raising questions about the RBA's monetary policy response.
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Analysis of Australian Labor Market: Public vs Private Sector Employment Growth

Australia's Public Employment Growth Masks Slowdown in Private Sector Jobs Market

Key Points:

  • 130,000 of the 437,000 new jobs were in NDIS-related sub-industries
  • Public sector employment grew by 6%, while private sector growth was just 1.4%

Implications: The support from NDIS-related jobs cushions the labor market, but concerns arise about a potential slowdown if government spending recedes. The Reserve Bank of Australia faces a delicate balancing act between controlling inflation and preserving gains in employment.

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