Westpac: As Illness Fades More Than Usual Go On Holidays

Westpac note that “while we agree that there has been a clear step down in employment growth, something we expected to see as the surge out of the COVID recovery lost momentum, the big question for us is: should we take this significant shift in employment growth at the end of 2022 and in early 2023 as the start of new softer trend, or even a correction in employment, despite business and household surveys still pointing to robust labour demand?”

• “We don’t think so, as the ABS noted some factors that would make you want to see more data before you accept the past few months being indicative of a new softer trend.”
• “The ABS noted that along with a larger-than-usual increase in unemployment in January, there was also a similarly larger-than-usual rise in the number of unemployed people who had a job to go to in the future. January is the most seasonal month of the year with people not just leaving jobs but also getting ready to start new jobs or return from leave. In January 2023 the ABS noted that more people than usual with a job, indicating they were starting or returning to work later in the month.”
• “And as we suspected in our preview there was a greater than usual ‘holiday effect’ while the rate of illness improved from December.”