Westpac has released its monthly jobs index, which registered an increase to 49.9 in October from 48.6 in September. According to Westpac’s Justin Smirk, the result signals a possible lift in the demand for labour in early 2014:
With the NAB Oct survey released today we can finalise the Westpac Jobs Index for Oct. The job index is a composite of the various labour market indicators from the business surveys, both actual and expected employment outcomes and overtime hours worked (actual and expected) where available.
The Jobs Index peaked at 48.9 in Jul, easing back to 48.8 in Aug and 48.6 in Sep before lifting back up to 49.9 in Oct.
The Index had been pointing to a modest softening in labour market demand suggesting total employment growth could hold below 1% to year’s end.
However, we have now seen a pick-up in the employment index from the various business surveys, in particular from the AI Group surveys and the NAB monthly business survey.
Overall, the index is now suggesting employment growth could pick up to around, or slightly more than, 1%yr by the end of the first quarter 2014.
The employment indicators from the business surveys can be quite volatile so we will be closely watching the data flow over the next few months.
The labour force grew by 1.2% in the year to October 2013, suggesting that the forecast improvement in employment growth would probably be insufficient to stop the headline unemployment rate from rising (see next chart).
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.
