What to expect from this week's Aus Nov labour force survey? - Westpac
The Economics Team at Westpac offered their take on the upcoming Australian employment report, due on Thursday, noting that a continuation of the near term momentum, at least into early 2018, is likely.
Total employment was softer than expected in October lifting just 3.7k, below Westpac and the market’s expectation of +20k and +18.0k respectively. September’s result was revised up to 26.6k from 19.8k.
In the month total hours worked rose by a more reasonable 0.3%. This relates to a 24.3k increase in fulltime employment, which was mostly offset by a 20.7k decrease in part-time employment. Over the past year, total employment is up 3.0%yr with full-time employment increasing 3.7%yr and part-time employment increasing 1.5%yr.
The business and consumer surveys remain quite robust suggesting a continuation of the near term momentum at least into early 2018. Our forecast 25k lift in employment will see the annual pace ease back to 2.8%yr from 3.0%yr.
In October, the unemployment rate fell to 5.4% the lowest seen since February 2013 but is still above most estimates of full employment of around 5.0%.
The October drop in unemployment was due to a drop in the participation rate to 65.1% from 65.2%; male participation was down from 70.7% to 70.5%. The overall participation rate drop appears to be concentrated in Vic, down to 65.7% from 66.3%, back to near the level seen in February this year.
We are expecting to see a small 0.1ppt bump up in the participation rate with the robust employment number. This will be enough to offset the employment gains thus holding the unemployment rate flat at 5.4%.