VIEW: Westpac Expects 40k Employment Drop

March labour market data print today and Bloomberg consensus expects a moderate 10k rise with the unemployment rate returning to its November/December level of 3.9% after February’s 116.5k jobs gain and drop in unemployment to 3.7%. There is a wide range of forecasts and Westpac is at the pessimistic end forecasting a 40k drop in new jobs and a 0.3pp rise in the unemployment rate.

• “The ABS is currently grappling with shifts in seasonal patterns, making it difficult to completely remove the influence of seasonal dynamics from seasonally adjusted figures. March should provide a clearer read on conditions and hopefully allow for a more thorough assessment of underlying trends. That said, we do expect headline figures to reflect somewhat of a retracement from an unusually strong February.”
• “Our forecast of –40k would still see the employment finish Q1 2024 around +90k, a step-up from Q4 2023 (+53k) and Q3 2023 (+79k), but less than the comparable period from last year, Q1 2023 (+150k).”
• “With the influence of large seasonal dynamics (hopefully) fading, we expect participation to nudge back down to 66.6%. That would see the unemployment rate jump back up to 4.0% in the month, an outcome that would be broadly in line with the well-established gradual uptrend over 2023.”