Most economic analysts project a prolonged period of stagnation for the Australian economy. Indicators suggest the labour market is losing momentum; quarterly employment growth has flattened and underemployment is ticking upwards. In November, active job-seeker registrations rose by 18,500, marking the fifth consecutive monthly expansion in this measure. Simultaneously, the official Labour Force Survey rate of unemployment climbed from 4.1% to 4.5%. Job vacancy advertisements have also contracted sharply, reflecting diminishing aggregate demand across domestic markets.
This contractionary phase is no longer localized. Initially, high interest rates dampened residential construction and retail activity, but the slowdown has now permeated through to professional services and logistics. Industry groups forecast that total unemployment could increase by over 150,000 workers by the end of next year, pushing the unemployment rate significantly higher.
Explain why 'diminishing aggregate demand across domestic markets' (Extract D, lines 5-6) is likely to lead to rising unemployment.