Macroeconomic policy settings are supportive of growth, with governments planning significant infrastructure spending and monetary policy remaining very accommodative. The resilience of the economy is evident in the Australian labour market, where the outlook has continued to improve. A year ago, our central forecast was that the unemployment rate would be close to 6 per cent at the end of 2021.
The outcome was much better than this: 4.2 per cent. There has also been a welcome decline in underemployment as many people have been able to obtain additional hours. Labour force participation has increased and the share of the working age population with a job has never been higher than it is now.