Australia's jobs market is in for a rocky ride over the next two years, with some economists predicting the unemployment rate rising as high as 11 per cent, as consumer spending is curtailed and economic growth falls.
Many economists think the federal government's $10.4 ($11.86) billion fiscal stimuluspackage and still strong Chinese economic growth would give Australia some protection from an expected global economic recession.
However, all agree jobs will be lost, as consumers struggle to pay off their debt burden.
The best case scenario is for a jobless rate of 11 per cent by 2010, according to a Sydney academic who has also forecast official interest rates falling to zero over the same time frame.
But on a worst case basis, University of Western Sydney associate professor of economics and finance Steve Keen says one in five people could be out of work by 2010, as sky-high household debt levels weigh on demand.
That would be the highest level since the Great Depression almost 80 years ago, when the jobless rate peaked at 29 per cent.
"That would be a worse-case scenario ... I hope it doesn't hit that level," Dr Keen said.
