There are many business surveys out there and most have questions, in some shape or form, that are applicable to the labour market. To generate the broadest and deepest labour market indicator possible, Westpac compiles all the relevant indictors from these surveys into the proprietary Westpac Jobs Index.
The Index continued to improve in Jan, at 50.1 from 49.3 in Dec and 48.7 in Nov. The index is set so the long run average equals 50. The Index had been on a general firming trend since the low of 45.1 in Apr 2013 till it peaked at 50.9 in Sep 14. The Dec & Jan lift has taken it back within a whisker of that reading.
The Index correctly highlighted some upside momentum in the labour market through late 2014, up to around a 2%yr pace by end 2014. It was also suggesting the pace could ease after a solid start in early 2015.
The bump up in annual growth in total employment in the Dec Labour Force Survey to 1.9%yr is consistent with the Jobs Index. According to the Index the pace of employment growth could moderate through the first quarter of 2015 but it is likely to strengthen back to just under 2%yr by end of the second quarter.
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.
