Westpac Look For Slightly Below Trend Employment Growth

Ahead of today’s labour market report Westpac suspect that “illness related absences and a ‘catch-up’ in summer leave will result in an employment print slightly below trend, as opposed to another outright decline. Hence, we have pencilled in a 15K rise in employment.”

• “The unemployment rate is just 0.1ppts off the 50-year low print of 3.4% in October, signalling a still historically tight labour market. The working age population continues to grow at a very strong pace, up from 0.6% Y/Y in December 2021 to 2.1% Y/Y in December 2022. The recovery in overseas travel and migration flows is positively contributing to the growth of the working age population, to an extent that exceeds the prior peak of 1.7% Y/Y in 2018/19 which was also associated with robust immigration.”
• “Holding participation at 66.6% and the rate of growth in the working age population steady, this should see a 20K increase in the labour force in December. Our forecast 15K gain in employment is enough to hold the unemployment rate at 3.5%.”