The past month has been a whirlwind of economic data releases, furnishing operators with a trove of statistics, trends, decisions, and insights to decipher in terms of their business implications. The most recent dataset to surface pertains to the unemployment rate for January, unveiled by the Australian Bureau of Statistics (ABS) on February 16th.
In a departure from the norm, the unemployment rate has actually experienced an uptick, marking a notable occurrence. This holds significance as this increase had been anticipated and was encompassed within the projections issued by both the Reserve Bank and the Treasury. When the RBA initiated its rate hikes in May 2022, the unemployment rate, alongside inflation, was pinpointed as a pivotal economic gauge of concern.
In the course of time, we've witnessed the unemployment rate plummet to levels that had long been elusive. However, the current trajectory showcases a gradual ascent in this rate. Consequently, operators might be contemplating whether this will lead to a pause in rate hikes and potentially render job vacancies easier to fill.
During recent committee hearings, Governor Lowe's insights were sought regarding the potential ramifications on jobs and the broader economy should elevated inflation persist. His response illuminated a scenario where unemployment would continue its upward trajectory, potentially leading to job losses. He emphasized that heightened unemployment exacts a considerable toll in the pursuit of curbing inflation.
For numerous businesses, this evolving panorama has introduced an added layer of complexity and uncertainty.
ABS Unemployment Rate Report
The ABS revealed the unemployment rate in January rose from 3.5% to 3.7%. The Head of Labour Statistics for the ABS, Mr Bjorn Jarvis said the number of employed dropped by around the 11,000 mark while the number of unemployed rose by 22,000 people.
Mr Jarvis noted the outcome was the second month in a row that employment had fallen (unemployment risen) but the result followed the strong 2022 growth. January is of course a seasonal period as noted by Mr Jarvis. There is a tendency for people to leave jobs late in one year and be preparing to start new positions in the new year. Mr Jarvis said that more people than usually recorded indicated that there were starting new jobs in January.
While not noted by the ABS, this could reflect the tightness in the labour market and the competition in some industries to attract workers. People may have been out looking and found better opportunities.
In a good sign for employers, the sick leave figures were back to average. The levels seen prior to the pandemic. This could mean less hours will be lost to COVID in coming times and represent good prospects for improved productivity.
The trends for the January reporting period see the participation rate decreasing to 66.5%; employment numbers increasing to 12,753,200; underemployment remaining steady at 6.1%.
An interesting note on the unemployment rate figures is a decrease in full-time employment and an increase in part-time employment. Part-time represents 30.2% of employment.
Actioning New Truck Acquisitions
The significance of the latest unemployment data will vary across industry sectors and for individual businesses. Whether or not this increase impacts decisions to invest in new vehicles will need to be assessed individually.
The labour market has been extremely tight, with many employers finding difficulties filling jobs in order to operate at optimum capacity. A rise in unemployment may indicate an easing of that tightness, with more people in the market for jobs. But drawing such broad assumptions from one month of data would not be considered conclusive, especially as it was for January, a very seasonal period for workers to change jobs.
But the situation may be seen as a positive sign for some operators and reason to move on those truck acquisition plans. If you're considering options beyond new vehicles, exploring Used Truck Finance - Old Trucks Loans might also be a suitable path for your business's growth strategy.
What should also be considered is the examination of factors that could influence truck loans, particularly the Interest Rate Determining Factors. There is a very strong probability of further interest rate rises in the coming months. While this stance was initially signaled in the RBA Board’s February statement, it was reiterated multiple times as the Governor and Deputy Governor appeared before Government committee hearings last week.
Decisions by the RBA have been affecting truck lending rates and getting finance secured at the cheapest rate ahead of more rises could represent a significant savings over the term of the loan.
The 30 June deadline for temporary full expensing should also be kept top of mind. Some Possible Benefits Of Chattel Mortgage Finance make it the most suitable type of loan for this tax measure. Chattel Mortgage is considered the most suitable type of loan for this tax measure.
If the unemployment rate has significance for your business, Jade Truck Loans is ready to act quickly for operators wanting to move on new truck purchases.
Contact Jade Truck Loans on 1300 000 003 for cheaper truck finance.
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