Unemployment increases: is the Reserve Bank ignoring all the important reasons for a rate cut?

Switzer

Oct 17

Will the shock spike in the jobless rate guarantee a Cup Day rate cut? Does the Federal government care that many businesses are cracking under the pressure? Australia received an economic shock that ...

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Does the Federal government care that many businesses are cracking under the pressure?\nAustralia received an economic shock that ...</p>\n\n<a href=\"https://switzer.com.au/the-experts/peter-switzer/unemployment-increases-is-the-reserve-bank-ignoring-all-the-important-reasons-for-a-rate-cut/\">Source Link</a>\n\n</div>\n","source":"switzer_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Unemployment increases: is the Reserve Bank ignoring all the important reasons for a rate cut?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nUnemployment increases: is the Reserve Bank ignoring all the important reasons for a rate cut?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-10-17 06:33 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://switzer.com.au/the-experts/peter-switzer/unemployment-increases-is-the-reserve-bank-ignoring-all-the-important-reasons-for-a-rate-cut/><strong>Switzer</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Will the shock spike in the jobless rate guarantee a Cup Day rate cut? Does the Federal government care that many businesses are cracking under the pressure?\nAustralia received an economic shock that ...</p>\n\n<a href=\"https://switzer.com.au/the-experts/peter-switzer/unemployment-increases-is-the-reserve-bank-ignoring-all-the-important-reasons-for-a-rate-cut/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4124","symbol_name":"机动车零配件与设备","start_time":0,"source_url":"https://switzer.com.au/the-experts/peter-switzer/unemployment-increases-is-the-reserve-bank-ignoring-all-the-important-reasons-for-a-rate-cut/","article_id":"2576077767","we_media_id":null,"thumbnails":["https://switzer.com.au/wp-content/uploads/michelle-bullock-rba-switzer.jpg"],"rights":{"source":"switzer_stock","url":"https://switzer.com.au/the-experts/peter-switzer/unemployment-increases-is-the-reserve-bank-ignoring-all-the-important-reasons-for-a-rate-cut/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2576077767","pubTimestamp":1760654039,"columns":[],"sourceInfo":{"source_id":"switzer_stock","name":"Switzer"},"weMediaInfo":null,"summary":"Will the shock spike in the jobless rate guarantee a Cup Day rate cut? Does the Federal government care that many businesses are cracking under the pressure?","collect":0,"end_time":0,"defaultTopTitle":"switzer.com.au","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4124":"机动车零配件与设备","CPI":"IQ Real Return ETF","BK7500":"支付概念","SMP":"Standard Motor Products Inc","BK7158":"交易和支付处理服务","SMP.AU":"SMARTPAY HOLDINGS LTD","BK7033":"数据处理与外包服务"},"translate_title":"失业率上升：央行是否忽视了降息的所有重要原因？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CPI":1,"SMP":1,"SMP.AU":1},"content_text":"Will the shock spike in the jobless rate guarantee a Cup Day rate cut? Does the Federal government care that many businesses are cracking under the pressure?\nAustralia received an economic shock that should put a Cup Day interest rate cut back on the table, which only a bad inflation reading on October 29 could kill off. However, recent statistical revelations about the economy might not be capturing why unemployment spiked to the highest level since Covid KO’d our economy!\nMore on that later. For now, let’s look at what the statistician told us about the job market. Here goes:\n\nThe unemployment rate rose from 4.2% to 4.5%, which is a huge jump.\nMore Aussies were seeking work last month with the participation rate ticking up to 67% in September from 66.9% in August.\nBut hiring has slowed to a monthly average of 12,900 so far in 2025, down from the 2024 average of 32,600.\nThe number of unemployed Australians jumped by 34,000 in September to 684,000 people, also the most since October 2021.\nThese numbers pushed the Australian dollar down half-a-cent to 64.8 US cents.\n\nIf Reserve Bank Governor Bullock wasn’t worried about our inflation rate ticking up, you’d look at these jobs numbers and say you could confidently punt on a Cup Day cut of 0.25%, taking the cash rate to 3.35% from the current 3.6%.\nHowever, speaking at a conference in Washington on Tuesday, Bullock reiterated Assistant Governor (Economic) Sarah Hunter’s recent comments that the August monthly consumer price index (CPI) indicator suggested that the September quarter CPI would be stronger-than-forecast in their August Statement on Monetary Policy (SMP).”\nThis is why the CPI reading on October 29 will be a big deal for a potential rate cut on the first Tuesday in November — Cup Day.\nWhile this is what conventional economic analysis would look at, legendary economist J.K. Galbraith taught us that the consensus view on economics can be off the mark.\nWhy? Well, computer models rely on the history of business, consumer and even government responses to developments that are outside the square. Donald Trump and his shock return to tariffs isn’t something most economists expected. How these taxes on imports affect US and international economic activity, and even government policy reactions worldwide, could confound the economic models economists and central banks use to guess where the economy is heading.\nBut there are also local factors that couldn’t be fully understood that might explain why hiring is slowing and unemployment is rising. Let me list some, for those public servants and banking economists who might not effectively survey the small business sector.\nHere goes:\n\nWork from home has become a curve ball most employers have to deal with, and Victoria has proposed laws to make it a legal right.\nEmployers are the one dealing with mental health issues in the workplace and they often don’t have HR departments to deal with this. This huge rise in claims of this nature is apparently sending the workers’ compensation insurer in NSW broke, such that a Labor Treasurer, Daniel Mookhey, is pleading to put caps on compensation. Does anyone think of the bosses who have to deal with these disruptions? The paperwork for them dealing with claims of this nature is huge and takes them away from doing business and earning revenue that supports their business. (As an aside, I’d like to know if an employer would ever win a case against a ‘bully’ employee, because they’re out there?)\nTax offices — federal state — are on the prowl for back taxes and they’re playing hardball on businesses, often exaggerating what’s owed as though it’s an ambit claim.\nWhile interest rates might be down three times this year, they were raised 13 times before that. This not only has raised business costs but also has hurt customers willingness to buy, business owners taking risks and employing staff.\nOur current economic growth rate is a low 1.8% compared to an historic rate of 3.4%.\nPower bills have rocked many businesses and have hit profits for those who have a big demand for electricity or gas.\nMany employers are looking at Artificial Intelligence and wondering if challenging, expensive employees can be replaced by AI.\n\nThis chart shows NAB’s surveying of business confidence and conditions (i.e. how businesses feel right now). You’ll see that while confidence is rising slightly, the levels are way below where they’ve been when economic growth was higher and business challenges were lower.\n\nThe black line shows business conditions or how businesses feel about their business has been on the slide.\nIt’s time our governments and the RBA started to understand how important business owners/employers are to the health of the economy and how they need to be encouraged, rather than beaten into being cautious, down graders of their businesses to make sure they can survive.\nBusinesses have had to endure Covid lockdowns, 13 interest rate rises, work-from-home challenges and ‘tough’ tax regimes on top of a new age workplace where they really have to be careful about what they say and do. For many, it’s affecting the growth of their business and, in turn, the growth of the economy.\nAs an economist, while I’m not sure how significant this is to the overall economy, the RBA, the Albanese government and the state Premiers ignore these issues at their peril.\nInterestingly, the state where the government is seen as the most anti-business and anti-investor is Victoria. And it’s the state where house price growth is the slowest and unemployment is the highest at 4.7%.  There might be something in that.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}