Westpac: Signs That Employment Momentum Has Eased

Ahead of today's labour market report Westpac note that “the 900 increase in employment in September was the third consecutive disappointing print from the Labour Force Survey. With a three-month average increase in employment of just 200, compared to working age population growth average of 17.4K per month over the same period, it does appear that the Australian labour market stalled heading into the last quarter of the year.”

• “Consumer unemployment expectations remain at historically sound levels but nonetheless, they are 17.8% higher in the last two months suggesting households are not as confident about jobs as they were, a sign employment momentum has eased. Business surveys remain upbeat and vacancies at historical highs so the question is: are we at full employment resulting in a lack of suitable candidates?”
• “We can’t be sure if that is the case but we do know that the lack of suitable labour is a critical constraint on activity.”
• “Given the rounding only just kept the unemployment rate at 3.5%, we would argue that September was a softer than expected update on the labour market.”
• “Holding participation flat in October, our forecast 15K gain in employment is not enough to prevent the unemployment rate rounding up to 3.6%. We see there is a risk of a softer gain in employment in October while participation can remain robust, hence we see upside risk to our unemployment rate.”