An unexpected increase in employment in February of an extra 116K Australians employed has meant the unemployment rate has dropped to 3.7%, around the level where it had been 6 months earlier. Economists had expected unemployment to increase due to the slow down in economic growth. Population data for the September quarter showed a 2.5% annual growth in population driven by net migration of 550K people. The ABS has stated the February increase in jobs is due to a larger number of people in December and January who had a job they were waiting to start and were considered unemployed in the data. However, the overall trend is a slowing down in growth rate of employment since March 2023. Employment figures are eagerly watched as the Reserve Bank monitors unemployment and it is a factor into their decision to cut interest rates. 

At the last meeting of the Reserve Bank board last Tuesday, they held rates at 4.35%. The Reserve Bank has found one in 20 borrowers were in negative cash flow as they struggled to repay their mortgage, with one in 3 households have a mortgage in Australia, this translates to 

roughly 200K households (12 million households in Australia). Real (adjusted for inflation) disposable income has fallen 7% per person since 2022, leaving many people having to make changes to their lifestyle to make ends meet such as cutting back spending on non-essential items or trading down purchases, drawing on their savings or working more hours. 

What does this mean for Berries? 

Whilst the berry buyer tend to be high affluence, moreso for Blues than Strawberries, we need to be conscious of buyers looking for value and to stretch their dollars further. Shoppers may be lured into switching to other fruit categories that present great value and quality and may reduce the frequency that they buy berries. There is still an opportunity to capture affordable treat occasion as we all need products that lift our spirits particularly during tough times.