The labour market remains relatively tight, although the unemployment rate has been rising gradually and has surprised negatively in recent quarters compared to our forecast. The average share of unemployed persons is projected to rise from 3.8% in 2024 and 4.4% in 2025 onwards to 4.6% in 2026, with a slight decline to 4.5% in 2027. This seemingly mixed labour market picture, in our view, primarily reflects the culmination of structural changes in the labour market and a convergence towards a neutral unemployment rate from historically very low levels, rather than a cyclical cooling of the economy.
Source of primary data
MLSA, CBA
Note
The unemployment rate from the Labour Office measures the number of registered jobseekers aged 15-64 relative to the total population aged 15-64, which is different from the conventional unemployment rate (e.g. the CSO sample rate), which is usually expressed relative to the economically active age cohort, i.e. the sum of the employed and unemployed. \The "Actual" and "CBA forecast" represent the full-year average and the "Actual ytd" is the year-to-date average. Data adjusted for working day differences and seasonal effects. The dashed line "middle band of 25-75% forecasts" represents the middle half between the 25th and 75th percentile of all forecasts in the CBA consensus.