by Chris Becker
The ABS will release its volatile monthly Labour Force data tomorrow and with unemployment forecast to rise further, todays release of a new leading indicator by the Minister for Employment is timely.
Here are the results, with the Chinese PMI the major culprit for the fall:
The new Indicator (with an improved predictive capability and a longer forecasting lead-time) peaked in January 2014 and has been falling since then, indicating that employment could grow more slowly than its long-term trend in coming months.
The Department of Employment’s new Monthly Leading Indicator of Employment (the Indicator) has fallen for the twelfth consecutive month in January 2015, after rising for fifteen months previously.
This indicates that employment growth is likely to be below its long-term trend growth rate of 1.2 per cent in coming months. Cyclical employment has already fallen for six consecutive months. The Indicator’s fall is mainly attributable to the Purchasing Managers’ Index for Manufacturing Output in China from the National Bureau of Statistics of China (NBSC).
And how the indicator is derived:
Probably not enough juice to get the RBA to consider cutting rates next month, or indeed the Department of Employment to enact actual job creation policies instead of trying to cut poor people’s access to timely healthcare. But a clear sign that not all is well in the post-mining boom Australian economy.