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Is Australia headed for a recession? The job data paints a grim picture

The Reserve Bank has raised the alarm over a potential recession in Australia.

As the country battles consecutive cash rate hikes, job losses, soaring fuel prices and volatility from the war against Iran, experts warn the data paints a grim picture for the economy.

The latest employment figures have now stoked fresh fears that Australia's economy could be shocked into a recession for the second time in six years.

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Is Australia headed for a recession

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The RBA flagged that a domestic recession could be a necessary evil to drive inflation down.

"We don't want to have a recession, but if it's hard to get inflation down, then we're going to have to deal with that, possibly," RBA governor Michele Bullock said.

Treasurer Jim Chalmers, however, flatly denied this was a possibility.

"No, that's not something that we're anticipating or forecasting or expecting," Chalmers told ABC's 730 program.

Inflation remains the biggest threat to the Australian economy and this has been compounded by a deflating job market.

Fresh job figures revealed the unemployment rate rose to 4.3 per cent in February after 35,000 people left the workforce.

Australian Bureau of Statistics (ABS) data also found the number of hours worked fell 0.2 per cent, with more workers on part-time hours rather than full-time.

Meanwhile, job advertisements took a tumble in the same period.

Ads decreased by 0.5 per cent month-on-month in February and are down 2.6 per cent year-on-year, according to the latest employment report from Seek.

Applications also dropped by 0.6 per cent as workers stay put in an uncertain job market.

Pedestrians in the Sydney CBD.

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Seek's Senior Economist Dr Blair Chapman told Nine.com.au that the job market is generally a safe indicator of where the economy is headed.

"A sharp decline in jobs ads can be a bit of a red flag that demand is going to slow across the economy," he said.

"Job ads are a forward-looking indicator of employer intent – when businesses pull back on hiring, it signals reduced confidence in future demand and activity.

"The current decline we're seeing is steady but gradual, not a sharp decline that should trigger worry."

Chapman tempered fears that a recession is fast approaching despite the declining job figures.

"Combined, these signals point to weaker demand and a labour market under increasing pressure, though the current data suggests a gradual slowdown rather than a sharp contraction," he added.

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Australia broke a 30-year dry spell after it entered a technical recession during the COVID-19 pandemic in 2020.

Before that, Australia suffered a recession from 1990 to 1991 when GDP fell by 1.7 per cent and the unemployment rate rose to 10.8 per cent.

What is a recession?

A recession is when a prolonged period of weak or negative growth in gross domestic product (GDP), which is the monetary value of all goods and services, is accompanied by a rise in unemployment, according to the RBA.

Essentially, if GDP goes down and unemployment goes up it can equal a recession.

A "technical recession" – which may not be accompanied by a jump in unemployment – is traditionally defined as two consecutive quarters of negative growth in GDP.

Several other economic indicators are also weak during a recession, including household spending, business investment and the number of businesses that close down.

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How loophole allowed longshot politician to win election with profanity directed at Trump

A US politician has won an upset election victory on the back of a simple but very effective message: "F— Trump".

Juliana Stratton has defied a year of polls showing her trailing a big-spending rival to claim a win in the Illinois Senate congressional primary.

Stratton, the Illinois lieutenant governor, was outspent 30 to one by Congressman Raja Krishnamoorthi for the coveted prize.

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Juliana Stratton is the Democratic nominee for Illinois' Senate seat.

But her ad, which only started airing in the past few months, made an immense splash in the race.

The 30-second ad features various people with varying intensities of a Chicago accent simply saying to the camera: "F— Trump. Vote Juliana."

While broadcast television strictly regulates against profanity, it is prohibited from censoring politicians' ads.

So viewers in Illinois heard all of that four-letter word.

In the ad, Stratton described President Donald Trump as a "wannabe dictator" and vowed to abolish ICE (Immigrant and Customs Enforcement).

"I'll hold Trump accountable for the crimes he's committed," she said.

In the weeks after the ad aired, Stratton went from trailing distantly in the polls to overtaking Krishnamoorthi.

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Juliana Stratton's ad featured various Illinois voters delivering a blunt message to Donald Trump.

And yesterday she clinched an upset victory by a larger-than-expected margin.

Krishnamoorthi had led in the polls in large part because he had ads on TV promoting himself for much longer.

But he was dogged by criticism of his support of the cryptocurrency industry.

The cryptocurrency industry, in turn, was supporting him to the tune of millions of dollars in backing. 

In the heavily Democratic state in what is likely to be a good year for the party, clinching the nomination is tantamount to claiming the job.

Stratton is on track to become the fifth Black woman elected to the US Senate.

Donald Trump said the war would be over "when I feel it in my bones".

While Trump has been unusually successful as a Republican in midwest states, he has consistently been deeply unpopular in Illinois.

The seat is open because of the retirement of Dick Durbin, a longtime Democratic powerbroker in the Senate.

Stratton will face general election voters in November's midterm elections.

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