Jobs data, mid-year budget update to dominate agenda

An update on the state of the federal finances is expected to show a substantial improvement in the bottom line.

The Mid-Year Economic and Fiscal Outlook is likely to land midweek and reveal a fresh set of Treasury’s economic forecasts and a healthier budget outlook than was detailed in May.

The $13.9 billion deficit projected for 2023/24 financial year in the past budget is likely to be smaller, but the federal treasurer has played down the prospect of a second surplus.

A record $22 billion surplus was recorded in 2022/23 due to strong revenue growth from surging commodity prices and low unemployment and wage growth.

Some economists are tipping another year in the red due to higher-than-expected revenue, including Rich Insight’s Chris Richardson, who is forecasting a $10 billion surplus for 2023/24.

The mid-year update will not function as a “mini-budget”, Treasurer Jim Chalmers says, and will not contain new cost of living measures to help those doing it tough.

A check-up on the labour market is also expected this week from the Australian Bureau of Statistics.

Thursday’s jobs report for November follows an uptick in the unemployment rate to 3.7 per cent in October from 3.6 per cent in September.

While the labour market is showing signs of easing, it remains very strong compared with historical normals.

Reserve Bank governor Michele Bullock is also due to speak at the AusPayNet Summit in Sydney on Tuesday.

She might offer more insight into the decision to keep interest rates on hold at the December meeting, as well as her thoughts on the weaker-than-expected economic growth data for the September quarter.

Other highlights include NAB’s business survey and Westpac and Melbourne Institute’s consumer confidence survey, both scheduled for release on Tuesday.