Westpac has today released its inflation and unemployment expectations chart pack for July, which registered a fall in unemployment expectations, but a small lift in inflation expectations.
Looking at unemployment expectations first, the index eased 3.6% in July, which follows a 6.3% rise in June and a 5.4% increase in May. The trend level of the index is now 22% higher than its long run average, which suggests that the unemployment rate will continue to rise, and points to a very weak outlook for full-time employment and total hours worked.
By city, the largest deterioration has occurred in the mining regions. In particular, WA is equal with Qld in being the most pessimistic about the labour market while NSW is now the most optimistic.
The Melbourne Institute survey of consumer inflation expectations lifted slightly in July, up 0.3% to 2.4% over the year, which is where it was in May. The trend is also drifting higher, although it remains well within the RBA’s 2% to 3% inflation target.
Full chart pack below.
Westpac Inflation & Unemployment Expectations Chart Pack (July 2013)
