WA’s unemployment rate dropped to 3.6% in May, driven by a sharp increase in the number of people employed.
This follows the larger than usual number of people waiting to start a new job in April finally commencing work. WA now has the lowest unemployment rate in the nation, with Australia’s unemployment rate reading 4.0%. While the tight labour market will continue to create difficult hiring conditions for businesses looking to employ workers, it should help to bolster the broader economy in the face of cost-of-living pressures.
WA’s strong population growth continues but has it peaked?
WA has once again recorded the nation’s highest rate of population growth, growing 3.3% over the year to December 2023. However, this is slightly down on the 3.4% recorded over the year to September, indicating population growth may have reached its peak at the end of last year. 
This increase continues to be driven by the explosion in net overseas migration, with WA welcoming a net 68,500 people from overseas in 2023 – up 48% from 2022 when international border restrictions were first relaxed.
A more alert RBA holds cash rate firm
The RBA kept the cash rate at 4.35% at its meeting earlier in the week as the Board stressed the need to remain vigilant to upside risks, with inflation easing more slowly than expected.
At her press conference, RBA Governor Michele Bullock indicated the Board did not even consider a rate cut when deliberating, with markets now ascribing a 15% chance of a rate hike at the August meeting. Higher than expected inflation, uncertain consumption growth and global uncertainty were all highlighted as key risks in the decision statement.
While we still think the RBA is more likely to keep rates higher for longer than to hike again, the upcoming inflation release before the next meeting will be particularly important given the RBA’s dependence on current data flows.
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