Via Damien Boey at Credit Suisse:
The slowing in growth of aggregate hours worked is very consistent with what leading indicators have been telling us for some time. Our proprietary labour market leading indicator has historically been a reliable predictor of trend growth in hours worked since 2000 (please see our recent article for details). It is based upon conventional leading signals such as ANZ job advertisements and the employment component of the NAB business survey. It also takes into account our domestic demand tracker, which assembles a wide array of real-time partial indicators on the state of the economy such as retail sales, credit, confidence, building approvals and infrastructure spending. Recently, we have seen broad-based deterioration across these signals. ANZ job advertisements have been falling for a few quarters, and our domestic demand tracker has been pointing to stagnation for just as long. More recently, the employment component of the NAB business survey has fallen sharply.
