NAB Look For Rebound In Employment

Ahead of today’s labour market report NAB expect “the unemployment rate to remain stable at 3.5% on employment growth of 30K in the month. We think the unemployment rate is likely to be the clearer read in the month, with large shifts in employment levels post-Christmas always a challenge for seasonal adjustment and adding uncertainty, especially in the employment count. We note as a downside risk that in the past two years, January employment growth was softer than surrounding months.”

• “The labour market is tight, and labour demand indicators remain strong even if some are off the very elevated levels seen through much of 2022. Seek Job Ads are 18% off their highs, but remain well above pre-pandemic levels and actually showed a small rise in January. We will be watching closely in coming months to see whether that stabilisation is confirmed.”
• “In the detail, we would expect to see a hit to hours worked in the month. January in each the past 2 years saw sizeable declines in hours worked due to higher-than-usual usage of annual leave as people used up excess leave built up through the pandemic amid strong pent-up demand for holidays. A similar phenomenon is likely this year.”