Conditions in the labour market showed further signs of weakening in April, with seasonally adjusted unemployment rising from 3.9 per cent to 4.1 per cent. Trend unemployment remained at 4.0 per cent, with the steadiness in the trend unemployment rate indicating that job creation is broadly just keeping pace with population growth.

The latest unemployment rate forecasts included in the Budget papers indicate an unemployment rate of 4.5 per cent by June 2025, which is broadly in line with RBA forecasts. NAB’s latest Monthly Business Survey (April 2024) also revealed an expectation in the business community that labour market conditions are softening.

CreditorWatch’s latest Business Risk Index data reveals an increase in the number of B2B trade payment defaults, and in fact these have sat at record levels for three months now. While not directly reflective of employment, it is likely that businesses that are unable to pay their bills on time will be decreasing their employment levels.

However, this trend isn’t being felt uniformly across the market, with industries such as healthcare and education still recording very low levels of trade payment defaults. This is where labour is still in highest demand, and where worker shortages are still being felt by employers.

At the other end of the scale, we expect that employment in the food and beverage and retail trade areas will continue to soften, as trading conditions are very difficult in the current interest rate environment.