There were 389,000 job openings in November
With job vacancies and inflation trending down, and more rate rises unlikely, consumer sentiment is set to improve in 2024 says Bank of Queensland chief economist Peter Munckton (pictured).
Munckton said talk of rate increases by the RBA this year is now “in the rear mirror”.
“I think there’s going to be no more surprises for people in terms of rates going up and I think that will be a good thing,” Munckton said.
“Of course, there are still some people who were lucky to have locked themselves into a very low fixed rate three years ago who will be rolling off on to a higher variable rate in the first half of this year, and there are a reasonable number [of them], … so that process has got a little bit further to play out.”
Speculation on interest rate drops
Munckton said the big question for 2024 is when will interest rates start to fall following the last rise in November last year.
“I think by this time next year we’ll start talking about interest rates going down if they haven’t already fallen, so that’ll be one big positive for the housing market,” Munckton said.
Munckton also expects modest house price rises this year as demand continues to rise, and the construction sector is unable to adequately ease the shortfall.
Job vacancies in decline
Munckton’s comments come after the Australian Bureau of Statistics revealed there were 389,000 job vacancies in November 2023, down 3,000 from August.
“This was the sixth straight quarterly drop in job vacancies, which have now fallen by around 18% from the historical peak in May, 2022,” ABS head of labour statistics David Taylor said.
“The number of unemployed people per job vacancy was 1.5 in November.
“While this is higher than 1.1, when it was at its pandemic low, it is still well below the 3.1 figure in February 2020.”
The ABS figures showed the decline in job vacancies was seen in most industries.
The strongest quarterly percentage falls were in rental, hiring and real estate services, which was down 14%, and education and training, which dropped 12%.
The only two industries where job vacancies rose were mining, where it jumped 2%, and public administration and safety, where there was a 1% rise.
Munckton said when it comes to the employment sector, getting the right workers for jobs remains a problem for some sectors.
“If you actually ask people out there how they feel about the jobs market they’ll say it’s not that hard to get a job right now; of course that’s different from getting the job you might actually want,” Munckton said.
High cost-of-living worries
“However, the biggest worry for people to be honest is not so much the jobs market, it’s the cost of living – inflation,” Munckton said.
While household budgets may be under the pump now, Munckton expects consumers to be feeling more optimistic as the year progresses and the cost-of-living reduces, with the latest CPI figure already showing a slight reduction.
“As we go through this year, we will start to see more and more signs that inflation will moderate,” he said. “I think we’ll see some improvement in people’s optimism because things will get a little bit cheaper, but the jobs market probably won’t be quite as strong.”
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