The unemployment rate fell below 5% yesterday, implying that workers will have more power to demand wage rises.
The ABS says the seasonally-adjusted unemployment rate dropped from 5.1% in May to 4.9% in June, the lowest level for more than a decade.
However, the trend might not be sustained if the Sydney lockdown continues for an extended period.
The fall in unemployment is running ahead of forecasts, with RBA in its monetary policy statement in May saying it expected unemployment to drop to about 5% by the end of this year and 4.5% by mid-2023.
It said at the time that “the lower forecast unemployment rate results in wages growth and underlying inflation picking up a bit faster than previously anticipated”.