The Westpac-Melbourne Institute Unemployment Expectations Index rose 2.1% in Sep following on from a –3% decline in Aug,–0.3% in Jul and –1.1% in Jun. Recall that a lower reading from the index indicates reduced concern around the labour market.
This is the first rise in six months leaving the index 6.0% below its Mar peak. The index appears to have peaked with a trend decline now evident through the last six months. The rise in Sept was not enough to reverse this trend with the trend series falling–0.7% in Sept following on from –0.4% in July and –1.5% in June.
The through the year pace is now 8.5%yr to Sep up from –0.9% in Aug. Remember we saw apparent trend peaks in 2012 and 2013 that ultimately proved to be false, or unsustained, turning points.
This time around the business surveys continue to reveal a more substantive improvement suggesting that this may be a more genuine turning point & that the rise in Sep was just monthly volatility.
As I’ve said before, that does not look like a peak in trend to me. Once we see lower lows in the peaks and troughs I’ll be satisfied. On unemployment, clearly there was some volatility in the recent number but the trend is up and the indicators suggesting a firmer jobs market remain modest. There is no substantive turn yet and consumers know it.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
