PHOTO: Experts say if the economy has not returned to normal when the ‘adrenaline hit’ of subsidies ends, households and business face a crunch point. Photograph: Lukas Coch/AAP
Analysts say falling house prices and income losses will result in lower long-term rates of household consumption growth
Household finances face a serious impact in the wake of the coronavirus shutdown, economists have warned, as loss of earnings, falling house prices and job insecurity combine to reshape the economy in a way not experienced by Australians for decades.
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Official figures released on Thursday showed that unemployment had risen to a “shocking” 6.2% in April, and with the jobless rate likely to rise until one in 10 Australians are out of work, a fundamental shift is occurring in the economy.
Although the reported rise in unemployment was not as bad as some expected (more than 8% was the consensus figure) and there remains hope for a swift recovery, the loss of income marks a serious blow to the economy.
Craig James, chief economist at Commsec, said the fall in jobs masked the future loss of income for many Australians and he suggested that the government might have to extend its jobkeeper wage programme and other handouts to keep people afloat.
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