Last week Reserve Bank governor Michele Bullock warned that a recession is possible if inflation expectations get away. “So, it’s not our base case, I don’t want it, but if inflation expectations get away, that’s the sort of scenario you might be looking at,” she told reporters.

Officially, a recession means two consecutive quarters of falling GDP, yet many economists argue that rising unemployment tells a clearer story. In the early 1990s, the RBA pushed the official cash rate to a staggering 17.5 per cent, a move that helped trigger a sharp economic slowdown.

During that downturn, unemployment surged above 11 per cent, according to ABC News (Alistair Kroie). The job market took years to recover, and the experience left a lasting scar on households that lost income and struggled to meet basic expenses.

Today Australia’s unemployment rate sits at 4.6 per cent, up from a post‑pandemic low of 3.5 per cent. While the RBA points out that more than a million jobs have been created in that period, even a modest rise in joblessness can translate into mortgage stress, reduced spending power and tougher choices for families.