Australia recorded its lowest level of Unemployment in the midst of the highly synchronized global slowdown.
Australia economy got boosted by the mining boom from 2003 to 2008. At this period, The Australian economy continues to benefit from trading substantially with Asia and in particular, China and experienced the robust growth in skilled immigration. Just over one in four Australians was born overseas.
In recent scenario, Employment is surging alongside the underemployment rise.
Alongside the Australia’s well performing labor market, one aspect that needs to be acknowledged is the record high level of underemployment at 8.5 %, in May 2015. This figure says more when observed that employment means that one has to work for one hour in a week.
Inflation
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In 2007 and 2008 inflation rise as the economic growth was high and the economy was fully employed. Inflation reached 4.4% in December 2008.
The weakening world economy and global recession caused inflation to fall in Australia, reaching 1.7% in December 2009, but then it rose again as economic recovery got underway.
Output Gap
If you see the time-series data for Period of 2007 – 2008, it clearly signs that the economy had run up against capacity constraints, and that there was the steady deterioration in Australia's productivity performance and the rise in inflationary pressures.
Since 2008, The Australian economy in terms of output gaps is operating close to or at trend real output. This also justifies imposing fiscal austerity on the economy, which is expressed by their goal to achieve a budget surplus.
Business Cycle
In the realm of business cycle analysis, The Australian economy is in the midst of the transition from the investment phase to the production phase of the resources' boom. This transition is freeing up labour from resource and resource-related