Recent Volatility Makes March Employment Drop Possible

March labour market data is published on Thursday and after the outsized 116.8k rise in new jobs in February due to the timing of new starts around holidays there will be a lot of focus and uncertainty around this release. There could be payback for the outsized March outcome, which was the highest since the pandemic-affected November 2021. Given recent volatility, it is worth looking through individual months and focusing on averages.

• Bloomberg consensus expects a moderate 10k rise with the unemployment rate returning to its November/December level of 3.9%.
• 10k new jobs would keep the 6-month average steady at 32.5k where it was in February. A flat outcome brings it closer to 30k and a 20k drop to around 28k. A negative outcome is a distinct possibility given February’s 116.8k rise and would leave the 6- and 12-month averages around recent trends. After March 2023’s 84k increase in employment, April fell 8.7k.
• There is a wide range of forecasts from -40k to +30k. Local bank expectations are also varied with NAB forecasting +30k, ANZ +25k, CBA flat and Westpac a 40k drop.
• The unemployment rate fell to 3.7% in February from 4.1% and consensus is expecting March to revert to somewhere in the middle with most estimates at 3.8-3.9%. ANZ & NAB are projecting 3.8%, CBA 3.9% and Westpac 4.0%.