Westpac: Labour Market Gains To More Than Offset JobKeeper Losses

Westpac note that "The JobKeeper (JK) employment subsidy expired on March 28. We estimate there were around one million people on JobKeeper on expiry. At the ending of the program, one in ten of those on JK were at risk of losing their jobs - around 100k. We have used an industry based analysis, crossed-checked with a national labour force based estimate. The indicators we used to guide our assessment of job losses by industry included: the difference between the growth in hours worked and the growth in employment; change in the number working zero hours; the number of firms expecting to reduce employment; and, the number of firms accessing government wage subsidies. These losses won't occur in one hit but will be spread over a number of months as firms assess the economics of their labour force and the viability of their business. The estimated job losses are a gross estimate of the impact. Net losses, which is how the Labour Force Survey will measure it, will be significantly less due to the underlying robust momentum of recovery in the labour market. For simplicity, we assume all the job losses occur in the June quarter, so the -100k due to the ending of JobKeeper will be offset by an expected +111k lift in the underlying employment growth momentum. With participation expected to track sideways, the unemployment rate will drift up to 6.0% in Q2 before the recovery in the second half of the year takes the unemployment rate back down to 5.7%."