We are living in unprecedented times currently where our economic data for the Government's domestic macroeconomic goals are varying wildly based on the impacts of COVID on the economy. This is meaning that the data or measurements alone cannot be trusted when it comes to judging whether the domestic goals have been achieved.
Today new data for the annual rate of GDP growth as well as the new monthly unemployment rate were released. Our current annual GDP growth is a whopping 9.6% while unemployment fell another 0.1% to 4.5%. Hopefully by now you've memorised the goal of strong and sustainable economic growth as the highest growth rate possible without causing unnecessary inflationary, environmental or external pressures of around 3-3.5% Real GDP growth per year. So you'd be understandable in seeing 9.6% and immediately freaking out that we are 6.1% above the top band of the goal. Surely this is unsustainable and inflation is about to surge right? Well it's likely not for many reasons outlined in the video below.
Now for the goal of full employment (the lowest unemployment rate possible without causing unnecessary inflationary or external pressures where only around 4.5% natural unemployment exists. Well the current measurement of 4.5% certainly IS around 4.5%, but how accurate is that number really? Hopefully you already know that the labour force participation rate has been shrinking over the past few months as people stop looking for work altogether as COVID lockdowns impact significant amounts of Australia. This alone means that the unemployment figures are inflated, but even more if you watch the video attached below you'll learn a few more reasons why maybe the goal of full employment is not actually being fully achieved.
If this blog was helpful for you and you are interested in similar content about the whole Unit 3&4 Economics course make sure you sign up to my Revision Lecture on Thursday September the 30th. (link below)