Treasurer Josh Frydenberg insists his second budget handed down last week is all about jobs.
Thursday’s labour force numbers for September will provide a starting point to judge its success.
Economists’ forecasts centre on the unemployment rate rising to 7.1 per cent in September after the surprise drop to 6.8 per cent from 7.5 per cent in August.
However, predictions are wide ranging – from 6.5 per cent to 7.5 per cent – given the volatile nature of the series since Australia started easing COVID-19 restrictions in parts of the country.
Likewise, while employment expectations centre on a 35,000 fall, forecasts range from a 90,000 decline to a 100,000 increase.
National Australia Bank economist Kaixin Owyong expects the jobless rate will rise to 7.3 per cent, reflecting Victoria’s stage 4 lockdown, which was expected to see one million fewer people going into work.
“That suggests a large number of people had their hours cut and it’s likely some of those people lost their jobs,” she said.
Treasury predicts the unemployment rate will be around eight per cent by the end of 2020 before finishing the financial year at 7.25.
It does not expect the rate to be below six per cent until 2023/24 when policy will again fixate on returning budget surpluses.
Just before Thursday’s job figures, Reserve Bank Governor Philip Lowe will deliver a speech to the Citi Australia and New Zealand annual investment conference.
It will be his first opportunity to respond to the budget, which forecast the deficit ballooning to $213.7 billion and government debt growing to over $1 trillion.
He will also be able to reply to persistent speculation the central bank is about to cut the cash rate to 0.10 per cent from 0.25 per cent, while making similar adjustments to its three-year bond yield target and its term funding facility rate for banks.
There is also talk it will start buying five and 10-year bonds in a further move to keep market interest rates low while pumping liquidity into the system.
Meantime, two sets of data will gauge what Australians thought about the budget and what it might mean for future household spending.
The weekly ANZ-Roy Morgan consumer confidence index is due on Tuesday and the monthly Westpac-Melbourne Institute sentiment survey is released on Wednesday.
Australian shares look set for a flat start on Monday, pausing for breath after scoring its best week since April on the approval of the federal budget and hopes of a stimulus package passing in the US.
Share futures were down just five points, or 0.1 per cent, to 6091.
On Wall Street on Friday, the S&P 500 rose 0.9 per cent to 3,477.14, the Dow Jones Industrial Average gained 0.6 per cent to 28,586.90 and the Nasdaq composite climbed 1.4 per cent to 11,579.94.
The Australian dollar was trading at 72.40 US cents compared with 71.75 US cents late here on Friday.