The unemployment expectations index rose 2.3% in Feb following a flat print in Jan (+0.7%) and a 4.6% rise in Dec. The index is now just 1.6% lower than where it was in Jun which had been looking like being a cyclical peak. The index has deteriorated since Sep (a rise in the index suggests consumers are expecting unemployment to rise more than they had been) rising 9.3%.
• This has resulted in a turnaround in the annual pace from –8.2% in Sep to 7.5% in Feb. Unemployment expectations are decidedly less upbeat than they were just three months ago.
• The trend series also highlights a cyclical triple top. The 154.1 print is not far of the 154.7 print in July and the 153.9 print in Sep 2012. These are the three worst prints for unemployment expectations since the post GFC surge.
• Households are clearly nervous about jobs again. Recent press on Holden, SPC, Qantas and now Toyota would not have helped.
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.
