Westpac has released its Australian Consumer Unemployment Expectations Survey for October, which revealed an improved jobs outlook amongst Australian consumers, with the index falling 3.9% in October – the largest monthly fall in just over a year – taking it 9.6% below its March 2014 peak. A lower reading from the index indicates reduced concern around the labour market.
Nevertheless, despite the recent improvement, the index remains very high:
And employment continues to lag population growth, which suggests rising unemployment:
My own view is that unemployment will continue to rise over the next few years. The housing construction boom is likely to run out of puff sometime next year just as the unwinding of the mining investment boom gathers pace. And then there is the hit to employment coming from the shuttering of the Australian automotive assembly and parts industry by 2017. Taken together, these are very stiff headwinds facing the labour market.
