The RBA offers a bleak outlook for jobs

THE latest statement from the RBA provides a bleak outlook for workers, with unemployment expected to rise this year.

factory workers

IF you are a jobseeker needing a bit of cheering up, or a wage-earner in need of a raise, it might be best to avoid reading the Reserve Bank of Australia's latest monetary policy statement.

The RBA's quarterly Statement on Monetary policy, released on Friday, said there were various factors weighing on demand for workers recently.

Slow growth in production of goods and services is one - the less you produce, the fewer workers you need.

And this sluggish growth has been especially evident in sectors of the economy typically using a higher proportion of labour in their businesses.

The RBA also says there has been a continued focus by firms on reducing costs and improving productivity.

There's also a climate of uncertainty leading to a general reluctance to take on new staff.

The RBA says this uncertainty is consistent with weakness in plans for investment in new productive capacity in the non-mining sector that the RBA hopes will drive the so-called "rebalancing" of the economy away from resources.

Meanwhile, the fading of the resources investment boom is tipping the balance in the jobs market in the wrong direction.

"Much of the weakness in employment has been accounted for by business services which, in part, reflects the effects of the shift from the investment to the production phase of the resources boom," the RBA said.

As a result of all these influences, the jobless rate has been drifting up for the past couple of years.

At last measure, in December, it was at 5.8 per cent, and within a whisker of being rounded up to 5.9.

But it's going higher.

"These factors are likely to continue to weigh on employment growth in the near term, and the unemployment rate is expected to remain on an upward trend for several quarters," the RBA said in the statement.

"With growth in economic activity expected to remain below trend for a few more quarters at least, it is likely that employment growth will be only moderate over the coming year and the unemployment rate will continue to edge higher."

But, all going well, the RBA said that from early 2015, stronger economic growth should generate more jobs, causing employment growth to pick up and for the unemployment rate to decline gradually.

The rising rate of unemployment or, as the RBA calls it, the "increase in spare capacity in the labour market", has brought wages growth by various measures down to "historically low levels".

Wages growth will pick up from around mid-2015 as the economy gathers pace, the RBA said.

"However, it will take some time for spare capacity in the labour market to be absorbed and so wage growth is expected to remain below its decade average."