Economy

Updates on the state of the economy, growth, inflation, and employment.

Economy
ABS: Unemployment flat at 4.1%, jobs slip in May
Australia’s unemployment rate remained unchanged at 4.1% for the fifth consecutive month in May, according to seasonally adjusted figures released by the Australian Bureau of Statistics (ABS). Employment declined by 2,500 people, while the number of officially unemployed people also fell by 2,600, resulting in a steady headline jobless rate. Markets expected a stronger result, forecasting an employment increase of around 25,000 people. The employment-to-population ratio dipped 0.1 percentage points to 64.2%, while the participation rate fell by 0.1 percentage points to 67.0%. Sean Crick, ABS head of labour statistics, noted: "Despite the slight fall in the employment-to-population ratio this month, the female employment-to-population ratio rose 0.1 percentage points to a record high of 60.9%." The modest decline in employment follows April’s unexpectedly strong result, when the economy added 89,000 jobs. Total hours worked rose by 1.3% in May, recovering from weak readings in March and April. These readings were disrupted by the Easter holiday and extreme weather events. The underemployment rate fell by 0.1 percentage points to 5.9% in May - 0.8 points lower than a year earlier, and 2.8 points below levels see
Economy
US Fed holds steady against perceived stagflation risks
For the fourth consecutive meeting, Jerome Powell's United States Federal Reserve has held rates steady between 4.25%-4.5%, maintaining its previously stated forecast. Powell said the rates hold was a calculated defensive manoeuvre against an economic enemy that last reared its head in the early 1980s: stagflation. The Fed's latest projections show GDP growth slashed to a meagre 1.4% as inflation surges to 3%, while unemployment forecasts have been revised upward to 4.5%, signalling labour market deterioration even as price pressures mount. The catalyst? The Fed alludes that Trump's tariff offensive weaponised uncertainty. During his press conference, Powell acknowledged that tariffs were "beginning to see some effects" on inflation, yet the Fed finds itself tactically constrained, unable to deploy traditional monetary tools without risking economic stagnation or inflationary acceleration. “Uncertainty about the economic outlook has diminished but remains elevated,” the Fed said in a statement. The political dimension adds another layer of complexity to this economic battlefield. Trump has characterised Powell as "stupid" for refusing to cut rates, demanding that the federal funds rate be slashed by at least t
Economy
WGC: 95% of central banks to boost gold stocks in 2026
Against a backdrop of geopolitical and economic uncertainty, central banks are expected to increase official sector gold holdings in 2026. At least that’s a key finding in the 2025 data released today by the World Gold Council (WGC). Based on WGC numbers, a record nine in 10 (95%) reserve managers expect central banks to continue increasing gold holdings in the next 12 months - up 17% on 2024 findings. After eight years of conducting this survey, the WGC’s Shaokai Fan noted a significant milestone this year. Virtually half (43%) of the central bank respondents intending to increase their own gold holdings in the coming year. “This is remarkable, especially considering how many record-high prices we’ve hit so far in 2025,” said Fan. “Notably, this reflects the current global financial and geopolitical environments. Gold remains a strategic asset as the world faces uncertainty and tumult. Central banks are concerned about interest rates, inflation, and instability – all reasons to turn to gold to mitigate risk.” The WGC’s 2025 Central Banks' Gold Reserves (CBGR) survey collects data from 73 of the world’s central banks. In the face of record-high gold prices, reserve managers continue to favour gold as a safe-haven
Economy
'Sell America' theme garners strength: Future Fund, BoA
Added to the current ‘sell America’ theme – underpinned by the rare alignment in falling United States equities, treasuries and the U.S. dollar – are recent Bank of America (BoA) findings that suggest the reign of U.S. equities as the world’s most prestigious asset class is over. Added further evidence to growing investor projections that America’s market dominance is rapidly falling is BoA’s latest fund manager survey, which expects global stocks to outperform U.S. equities over the next five years. Due to their rising valuations relative to their international counterparts, U.S. stocks have far outperformed international stocks over the past 17 years. But U.S. equities are rapidly losing their crown as the most reliable money-making trade. So far in 2025, the S&P 500 is on track to underperform global stocks by the most since 2009.Swing shiftHowever, if BoA’s survey results are correct, this about to change. Over half (54%) of asset managers expect international stocks to be the top asset class, while only 23% expect U.S. stocks to outperform. Equally revealing, despite the recent ascent in the gold price, only 13% of respondents expect gold to deliver top returns, while 5% are placing their bets on bonds. I
Economy
'Our budget is stronger, but not yet sustainable enough'
Australia's Treasurer Jim Chalmers delivered a sweeping defence of the Albanese government’s economic stewardship on Wednesday, outlining an ambitious second-term agenda aimed at enhancing productivity, strengthening budget sustainability, and improving national resilience amid persisting global uncertainties. In a speech at the National Press Club, Chalmers said Labor’s reform program would continue to be “practical and pragmatic” — grounded in economic reality, but driven by progressive ideals. He argued that Australia's economic challenges demanded “methodical reform, which is considered and collaborative and ambitious”, and rejected extreme ideological approaches that he believes have polarised global politics. “In our first term we stabilised and strengthened our economy, got inflation down, got real wages up, kept unemployment low and improved the budget position,” he said. Chalmers stressed that these gains were not coincidental, but rather the result of deliberate, responsible economic management, saying: “We have made the right calls, but there’s more to do.” He pointed to Labor’s achievements in maintaining historically low unemployment even while driving down inflation — a feat he described as “unusual if

Economy
Women in the workforce will help Pacific economic growth
The World Bank has delivered its latest economic report for the Pacific region, calling for more inclusive workforces to boost growth. The report found the Pacific region's growth was seeing a downward trajectory, with a projected 2.6% expected for 2025, compared to 5.5% in 2023. While inflation has eased somewhat it still remains above pre COVID pandemic levels, driving up the cost of living, and this is combined with a dependence on foreign aid and vulnerability to natural disasters, leaving many Pacific nation regions economically vulnerable. The tagline for the report, Employ Women, Empower the Pacific - A Strategy for Uncertain Times, underscores a key issue in hampering growth: lack of inclusiveness. The World Bank found that an average of just 42.7% of working-age women are active in Pacific labour markets, more than 15 percentage points lower than the men. Difficulties getting women into the workforce include a lack of paid leave and childcare, as well as social norms seeing those who are working in lower paid jobs, with a clear underrepresentation of women in fields such as engineering. “While Pacific nations can’t control global shocks, there is an opportunity to build stronger domestic foundations. Rea
Economy
IMD: Australia’s edge fades in global economy index
Slow economic growth and a drop in business efficiency have seen Australia drop five places in the global international competitiveness ranking. The country dropped from its best ranking since 2011 of 13th to 18th in the IMD Competitiveness Yearbook 2025, which ranks 69 countries' competitiveness. “This result shows [that] Australian businesses and policymakers should focus on measures to strengthen the economy, in particular reviving our flagging productivity,” CEDA Chief Economist Cassandra Winzar said. Business performance also dropped from 7th to 16th, and business efficiency dropped from 22nd to 37th. Australia has also dropped from the 20th to the 60th in real GDP growth. This reflects the nation's soft economic growth and high population growth in comparison to others in 2024. According to the Australian Bureau of Statistics, GDP rose 1.3% in 2024, compared with a 3.4% rise in 2023. Winzar suggested that Australia must focus on the longer-term challenges holding it back, as inflation looks under control in the short term. “We hope the Albanese Government’s recently announced productivity roundtable yields tangible policy outcomes that can lift us out of this funk,” Winzar said. “CEDA has long been ca
Economy
Money: 43% of Australians reject tipping culture
A recently conducted survey finds that nearly half of Australians say "no thank you" to tipping in the hospitality industry. The research from Money.com.au asked over 1,000 Australians asked how they feel when prompted to tip when they are at cafés, restaurants or bars. This could be through a QR code, EFTPOS payments or on the bill itself. Respondents largely said they refused to tip, citing cultural differences between Australia and other nations where tipping is more common such as the United States. However, 29% said they didn't mind tipping every now and then, 7% said they do it as a reward for good service and just 4% indicated they tip as a way to supplement pay for hospitality workers. When broken down into age groups, baby boomers were by far the most reluctant to tip, with 50% saying it has “no place in Australia" while millennials were the most inclined to leave a tip at 15% saying they always support tipping. Gen Z came in at 33% not minding the occasional tip but only if the service was good. “Tipping might be the norm in places like the U.S., but Aussies aren’t buying into it — even though more venues are adding tip prompts of 15–20% at checkout. It feels automated and forced", said money.com.au
Economy
China's economy steady in May; retail sales surge 6.4%
China’s economy posted steady gains in May, with a notable rebound in consumer spending and stable labour market conditions, while investment and industrial production figures slightly undershot expectations. The latest monthly data released by the National Bureau of Statistics on Monday showed that the “national economy maintained stability against the pressure”. According to the release, “production and demand grew steadily, employment was generally stable, [and] new growth drivers witnessed robust development”. Retail sales led the upside surprise, rising 6.4% year-on-year compared with the 5% increase expected, growing at the fastest rate since 2023. This also marked a 1.3 percentage point acceleration from the previous month, and a 0.93% gain on a monthly basis. Consumer goods sales totalled CN¥4.13 trillion (A$886.41 billion) in May. Among key categories, sales of grain, oil and food jumped 14.6%, jewellery sales surged 21.8%, and sports and recreational goods leapt 28.3%. Industrial production grew 5.8% in May from a year earlier, just below the 5.9% forecast, and advanced 0.61% month-on-month. Within this, manufacturing output rose 6.2%, mining output climbed 5.7%, and utilities production increased by 2.2%.