The Big 4 Weigh In On The Impending Labour Market Report

Australia’s Big 4 banks preview the upcoming labour market report (will hit at 02:30 London/11:30 Sydney)

• ANZ: The 61k rise in employment in May partly reflected a temporary boost from the federal election. Most of the additional 100,000 workers are employed on election day, which was after the May survey period, but some were employed beforehand to cover things like early voting. We think the reversal of this effect will see a smaller rise in employment of +20k and a fall in participation in June, resulting in the unemployment rate dropping 0.2ppt to 3.7%.
• CBA: We expect employment growth of 25k in June after a very strong result in May (+60.6k). Together with a slight fall in the participation rate to 66.6% (was 66.7%) we expect the unemployment rate to drift lower to 3.8%. The forward looking indicators of labour demand, particularly job vacancies remain at elevated levels.
• NAB: Employment data is expected to confirm a labour market that in the RBA’s words “is tighter than it has been for some time.” We expect employment growth of 30k in June and for the unemployment rate to tick down a tenth to a new 48-year low of 3.8%. A sharp bounce in participation seen in May points to added uncertainty. State participation rate breakdowns suggests that bounce should be sustained at 66.7%
• Westpac: Vacancies and business surveys suggest that labour demand remains very robust. We have pencilled an around trend increase of +35k for June. It is seasonally a soft month in original terms, so if we are still on a positive growth trend then that would suggest upside risks. However, we note the number unemployed to vacancies is down to a record low of 1.3, in the year before COVID it averaged 3.1 and normally ranges between 3 and 5, highlighting very tight supply. With an expected flat participation rate in June, the unemployment rate rounds down to 3.8%.