Official leading employment indicator falls

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ScreenHunter_10 Mar. 29 12.46

The Department of Employment has today released its Monthly Leading Indicator of Employment, which registered a 1.4% fall in October – the second consecutive monthly drop following September’s 0.02% fall (see next chart).

ScreenHunter_20 Oct. 09 14.48

The Indicator is supposed to anticipate movements in the growth cycle of employment via a composite index of four weighted series (ANZ Newspaper Job Advertisements, Dun and Bradstreet Employment Expectations, the Westpac-Melbourne Institute Leading Index of Economic Activity and the Westpac-Melbourne Institute Consumer Sentiment Index), which are statistically ascertained to lead employment growth over the last two decades.

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According to the Department of Employment:

…is too early to tell whether employment will continue to grow more slowly than its downwardly revised long-term trend rate of 1.3 per cent per annum over coming months. Previous estimates of falls in the Indicator in July and August have been revised to show very slight rises. Cyclical employment has fallen for five consecutive months, with the rate of decline steepening over more recent months.

Don’t worry, I am confused as well.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.