Official leading employment index falls again

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The Department of Employment has today released its Monthly Leading Indicator of Employment, which registered a 0.064pt fall in April – the sixth consecutive monthly fall (see next chart).

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The Indicator is supposed to anticipate movements in the growth cycle of employment via a composite index of four weighted series (ANZ Newspaper Job Advertisements, Dun and Bradstreet Employment Expectations, the Westpac-Melbourne Institute Leading Index of Economic Activity and the Westpac-Melbourne Institute Consumer Sentiment Index), which are statistically ascertained to lead employment growth over the last two decades.

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According to the Department of Employment:

This signals that employment should continue to grow more slowly than its long-term trend rate of 1.1 per cent per annum over coming months, because the Indicator has fallen for six consecutive months. Cyclical employment has now declined for eleven consecutive months.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.