Dynamic Business Logo
Home Button
Bookmark Button

Unemployment will affect rates, says Institute

The recent edition of the Melbourne Institute Monthly Bulletin of Economic Trends has forecast a rate cut in April following a rise in unemployment. The report sees unemployment rising from 5.2 percent to 5.5 percent in June, with the mining states to be hardest hit due to dampened demand for resources.

“The significant deterioration observed in February‘s unemployment data and the decline in the December quarter GDP, will probably generate another rate cut in April,” said Dr Michael Chua, a Melbourne Institute research fellow.

The Reserve Bank will cut 50 basis points (half a percent), the institute believes. The RBA maintained the cash rate at 3.25 percent this month, increasing the probability of a cut in April.

According to international financial services group Credit Suisse, the institute’s prediction echoes the actions of traders who have priced for an April cut of 50 basis points.

People who read this, also liked:
Interest rates remain unchanged at 3.25 percent
Unemployment rate reaches 5.2 percent

What do you think?

    Be the first to comment

Add a new comment

Adeline Teoh

Adeline Teoh

Adeline Teoh is a journalist with more than a decade of publishing experience in the fields of business, education, travel, health, and project management. She has specialised in business since 2003.

View all posts