Already a subscriber?Unemployment will rise to 4.5 per cent by this time next year, with sluggish economic growth translating into weaker hiring, Treasury expects.is expected to drift upward in coming months, potentially forcing cautious households grappling with higher interest rates, to save rather than spend looming tax cuts.
Treasury officials unemployment to rise from its ultra-low level. However, this could still lead to more saving, rather than spending.Leading indicators of growth like job openings have softened, and Treasury officials expect employment to expand by just 0.75 per cent in the 12 months to the end of June 2025 after growing 2.25 per cent this financial year.
The figure was in sharp contrast with the RBA’s forecast for inflation to accelerate to 3.8 per cent by December. That is in part because the central bank’s forecasts, released last week, do not include new household subsidies initiatives announced in the budget. The cost of living assistance and income tax cuts on July 1 will drive a sharp increase in household disposable income, which Treasury expects will lead to a boost in consumer spending.