The change in the Australian 2021 indicator of unemployment is the representation of cyclical unemployment since it lasted less than a year. While growing by 42.3% from 2019 to 2020, the unemployment rate decreased in the following year to 33.8% from 2020 to 2021 as seen in table 1 (University Name, 2022. The latter came close to a natural rate of unemployment:
Table 1: The Unemployment Rate in Australia
| Indicators | 2019 | 2020 | 2021 |
| Unemployment rate (%) – June Qtr | 5.2 | 7.4 | 4.9 |
| Natural rate of unemployment (%) *estimate | 4.5 | 4.5 | 4.25 |
As seen from table 2, the inflation rate in 2021 in Australia showed an increasing trend, doubling the rate from two years ago:
Table 2: Inflation in Australia
| Indicators | 2019 | 2020 | 2021 |
| RGDP– Annual Growth rate (%) | 2.0 | -1.9 | 4.2 |
| Inflation rate (% change) – GDP deflator | 2.1 | 0.6 | 5.7 |
The rising trend of consumer confidence and business confidence indicates that inflation is not demand-pull inflation. The growing demand is covered by abundant supply, as demonstrated in table 3:
Table 3: Business and Consumer Confidence
| Indicators | 2019 | 2020 | 2021 |
| Index of Producer / Business confidence | 104.0 | 92.1 | 101.2 |
| Consumer confidence (Index) – June Qtr | 100.7 | 93.7 | 107.2 |
The inflation in Australia, however, could indicate that there is cost-push inflation since the costs of production rose from -0.4 in 2020 to 2.2 in 2021, demonstrating a 650% change (University Name, 2022). Meanwhile, the labor productivity index has been growing for three consecutive years, as demonstrated in table 4.
Table 4: Producer Costs and Labour Productivity Index
| Indicators | 2019 | 2020 | 2021 |
| Index of production costs / Producer costs of prod’n – Annual % change | 1.9 | – 0.4 | 2.2 |
| Labour productivity index | 99.9 | 102.2 | 103.0 |
Lastly, exports and imports could also influence the inflation rate in Australia in 2021, demonstrated in table 5. As seen from the statistics, imports grew 8.12% from 2020 to 2021, while exports grew by 19.2% from 2020 to 2021 (University Name, 2022). This indicates a trade deficit, which made the domestic currency weaker.
Table 5: Exports and Imports in Australia
| Indicators | 2019 | 2020 | 2021 |
| Exports (goods & services) ($ millions) | 492.4 | 435.4 | 519.0 |
| Imports (goods & services) ($ millions) | 424.4 | 365.6 | 395.3 |
| Exchange rate – USD per AUD; a AUD buys, 30 June | .70 | .68 | .75 (June).
.72 (Dec) |
Reference
[University Name]. (2022). The Australian economy: Economic data 2019 – 2021. In Macroeconomics.