A week out from the Federal Budget to be delivered by Treasurer Jim Chalmers and two weeks from the next Reserve Bank interest rate decision, the Australian Bureau of Statistics (ABS) has released the latest unemployment figures. The figures reveal unemployment remains steady. For those planning to acquire new vehicles, the bigger interest may be what these figures may mean for truck finance interest rates.
The unemployment rate in conjunction with the rate of inflation have been noted by the RBA as key indicators that guide rate decisions. The tightness in the labour market with many businesses unable to fill jobs has been highlighted by the central bank as constraining supply and hence contributing to inflation.
But as noted in the RBA’s announcements over some time, there are many other factors, including global uncertainties, which are also of key concern to the Board and impact cash rate decisions. What may also be of interest to business operators is the data from the ABS on how the labour market in general is tracking. This information may assist businesses in planning future operations in regard to staffing prospects. When considering financial aspects related to these decisions, such as acquiring new vehicles for your business operations, exploring Commercial Heavy Vehicle & Truck Finance options can further contribute to your planning and growth strategies.
We provide an overview of the latest unemployment data as released by the ABS and any possible impacts the October figures may have on truck finance interest rates to assist operators make those vital truck acquisition decisions.
Latest Unemployment Figures
In the statement announcing the latest unemployment figures, the Australian Bureau of Statistics (ABS) notes that the reference period for the October survey is 2-15 October and for September was 4th to 17th of that month. The unemployment rate reported as remaining steady at 3.5% for the previous reporting period.
The Head of Labour Statistics for the ABS, Mr Bjorn Jarvis, said that approximately 1,000 new jobs were found, that is employment rose slightly, but 9,000 were added to the unemployment numbers. The result is that the unemployment rate increased slightly by less than 0.1%. When expressed in rounded terms, that is seen as remaining steady at the previous 3.5%.
Mr Jarvis said that while in recent months the growth of employment had slowed, there were still close to 500,000 people entering employment on a monthly basis and approximately the same number exiting employment each month.
Hours worked for the period decreased less than 0.1% for the reporting period. Mr Jarvis explained that part of the slowing in the number of hours worked was due to more people taking their annual leave in September. He notes that in September 2020 and 2021, less people took leave as a result of the COVID-19 restrictions and lockdowns.
The data around sick leave may be a significant consideration for business operators. In the reporting period the sick leave was higher than normal for September. But Mr Jarvis points out that the hours lost to sick leave was not the 2-3 times higher than was recorded earlier in the year.
In addition to the media release announcing the unemployment data, the ABS has also published a paper, Labour Force Australia which may be of interest to business owners. This document provides further information and details including regarding the regional labour market.
Possible Impacts for Truck Finance Interest Rate
Commentary on the latest unemployment figures includes views that possibly the creation of new jobs has ‘dried up’ and the unemployment rate has reached its lowest point. In recent Monetary Statements, RBA Governor Philip Lowe did say that the expectation was for unemployment to fall further before increasing in 2023 as the economy started to slow.
The next inflation figures are due from the ABS on Wednesday 26 October, which is less than a week out from the RBA Board’s next cash rate decision meeting on 1 November. Inflation is highly likely to be affected by the current flood situation. Large food production areas have been impacted by flood and this is expected to result in higher food prices moving forward. However, there could be a lag in the effect on prices which is not reflected in the next set of data.
Commercial truck loan interest rates are impacted by decisions by the RBA which are guided by the economic data. This includes the unemployment figures, the rate of inflation and other economic indicators and impacts. The steady unemployment rate appears in line with RBA expectations. The Board has said it is not following a pre-set path in regard to rate decisions. The October decision was a slowing of the rate of increase in the cash rate with a 0.25% rise as opposed to the 0.5% which was announced for the four previous months.
Truck finance lenders respond to cash rate decisions based on their individual policies and approaches. In October the RBA said further rate rises could be expected. By how much and when….all will be awaiting the 1 November decision.
Given the potential for additional rate increases, individuals contemplating the acquisition of new vehicles through financing would be prudent to accelerate their decisions, particularly when considering Loan Divisions.
Contact Jade Truck Loans on 1300 000 003 for a quote on new truck finance .
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.