There are many business surveys out there and most have questions, in some shape or form, that are applicable to the labour market. To broaden the depth and width of these surveys, Westpac compiles all the relevant indictors we can find into the proprietary Westpac Jobs Index.
With the release of the NAB monthly survey we can complete our Apr Jobs Index. The Index was flat at 48.4 in Apr, down from 48.8 in Feb and 49.0 in Jan. The index is based so the long run average equals 50. The most recent low was a 44.8 print in Apr 2013.
Westpac’s Jobs Index correctly indicated that the pace of total employment growth would slow less than 1%yr in the second half of 2013. The ABS reported total employment growth of just 0.5%yr in the year Dec falling to 0.4%yr by Jan 2014.
While the index has eased back, it still suggests we have passed the low point in the labour demand and that the improvement should continue through second quarter of 2014. But at sub 50, it is still pointing to the labour market underperforming population growth. Hence, the unemployment rate can still rise; Westpac’s forecast peak is 6¼:
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.
