What's making business news on Thursday
Unemployment remains at an historic low, ANZ warns of housing stress, and Labor's energy plan is set to pass parliament.
Mentioned: ANZ Group Holdings Ltd (ANZ), National Australia Bank Ltd (NAB), Westpac Banking Corp (WBC)
Here’s four things making business news headlines this Thursday, 15 December.
1. Shares follow Wall Street lower
The Australian share market has tracked Wall Street lower after the US Federal Reserve delivered its final rate hike for 2022.
As many investors anticipated, Fed chair Jerome Powell announced a smaller rate hike of 50 basis points, but signalled rates may have to move even higher than previously thought to rein in inflation.
2. Energy stocks in focus ahead of Labor bill
Labor’s energy bill is expected to be passed through parliament today, after securing support from the Greens and key Crossbenchers.
The bill includes a 12 month cap on gas prices and a $1.5 billion relief package for households and businesses.
Labor says the legislation will soften soaring electricity prices, which were projected to rise 56% over the next two years in the recent federal budget.
The Coalition has slammed the energy plan, seeking for it to be split it into two separate bills and warning the price mechanism would be “catastrophic” for economic policy in Australia.
3. Australia’s jobless rate remains at historic low
The unemployment rate has remained steady at 3.4% in November, with a better-than-expected 64,000 jobs added during the month.
The Australian Bureau of Statistics says the participation rate - increased by 0.2 percentage points to 66.8 per cent in November, returning to the record high seen in June 2022, and 1.0 percentage point higher than before the pandemic.
But CBA chief economist Stephen Halmarick says unemployment is expected to drift higher over 2023 as the effects of higher interest rates flow through to the economy.
"We think by this time next year the unemployment rate will be closer to 4.25%," Mr Halmarick told the ABC.
"It's worth remembering an unemployment rate in the low fours is still a very low unemployment number."
4. ANZ monitoring for signs of housing stress
ANZ (ANZ) chief executive Shayne Elliott says the bank is laser focused on customers at risk of falling into financial stress, as rising interest rates and inflation put pressure on households.
Addressing shareholders at the bank's AGM on Thursday, Mr Elliott said the ability to analyse these stresses at a granular level meant the bank could intervene early.
"For example, we can quickly identify home loans that are already in, or approaching, negative equity, actively monitor and help them as needed," Mr Elliott said.
"Our focus is on those customers most exposed to stress. Those with less secure employment, those who possibly bought homes right at the peak of the cycle, those more exposed to cost of living increases, or those who have suffered other shocks like family breakdown or illness," he said.
"I can’t over emphasise the impact that cost-of-living pressures are having in the community."
ANZ is the second big four bank to hold its AGM this week, following Westpac (WBC) on Wednesday where chairman John McFarlane announced plans to retire in December next year.
NAB (NAB) will hold its AGM on Friday.