NAB: October’s Labour Market Numbers Could Be Challenging To Interpret

NAB forecast “employment growth of 10K in October, with the unemployment rate ticking up a tenth to 3.6% from 3.5% (3.54% unrounded).”

• “Implicit in that forecast for reasonably soft employment growth is a nod towards a very strong outgoing rotation group in the month, which suggests sample variability points to downside risk to employment and upside risk to unemployment.”
• “Trend employment growth has slowed in the past few months and monthly growth was close to flat in September. Volatility in the jobs data has made interpretation difficult over recent months and some technical factors means October’s numbers could also be challenging to interpret with clarity.”
• “It is unlikely that the recent slowing in employment growth signals a material easing in labour market tightness given still strong labour demand indicators as seen in the NAB Business Survey employment intentions and record high measures of availability of suitable labour as a constraint on output at record highs. That said, SEEK New Job Ads have fallen 13.5% from their May peak, suggesting some moderation in the exceptional levels of unmet labour demand seen through the post-pandemic rebound and expansion, but remain at still elevated levels.”