Unemployment expectations fall sharply

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Accompanying good consumer confidence numbers today, there is also a good result for unemployment expectations. From Westpac:

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The unemployment expectations index fell 6.6% in Aug, the largest monthly improvement (remembering that a fall in the index suggests consumers are not expecting unemployment to rise as much as they did a month earlier) since the 6.9%fall in Nov 2012.

Through the year to Aug, the index is now down 8.2% compared to a –0.7%yr print in Jul and 3.2%yr print in Jun. Following two declines and one flat print, over the last three months the trend index fell 0.3% in Aug but is 20% higher than its long run average.

Despite the improvement, the index is still pointing to a weak near-term outlook for full-time employment and total hours worked.

We should note an interesting comparison to the Mar 1996 election; back then the index fell 19.2%, much greater than this month’s drop.

But be aware that the index then jumped 27.1% in Apr 1996. The improvement in the index was very short lived.

Unexpectations_bulletin_pack_September2013.pdf by Lauren Frazier

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About the author
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.