Moderate Jobs Increase Expected, Risk Unemployment Rate May Rise

The Australian labour market has been extremely tight with labour shortages widely reported and the unemployment rate at historical lows. This is unlikely to have changed in October. While employment growth momentum has slowed, for now it has been driven by a scarcity of available and qualified workers. If the data comes in as expected then it is unlikely to change the 25bp outlook for the December RBA meeting.

• Economists expect a moderate 15k gain in October employment after last month’s disappointing +0.9k. The unemployment and participation rates are expected to be stable at 3.5% and 66.6% respectively.
• There is quite a range of estimates from economists with a number of analysts expecting job gains of 20k-25k and one predicting 45k. At the other end of the scale, three economists expect employment to contract with one forecasting by as much as 20k.
• The median estimate for the unemployment rate is 3.5% and the average is 3.55%. 12 of the 27 analysts surveyed by Bloomberg expect the unemployment rate to tick up to 3.6% and one even to 3.7%. There is one projection for it to fall to 3.4%.
• Expectations for the participation rate are firmly centred on 66.6% with the outliers at 66.5% and 66.7%.