Australians are still far more worried about losing their jobs than usual, with today’s Westpac-Melbourne Institute unemployment expectations data remaining at a post-GFC high.
The index was flat in August but the trend is still up, thanks to a 3.6% fall in July, a 6.3% rise in June and a 5.4% rise in May.
The mining states have led the fall in labour market sentiment, with WA now the most pessimistic about jobs, followed by Queensland.
The trend level of the index is now 22% higher than its long run average.
This is something we are watching closely as it suggest we are still in a soft patch for the labour market and that unemployment is set to continue to rise modestly in the year ahead.
In particular, it is pointing to a very weak outlook for full-time employment and total hours worked.
In particular, we are watching with interest the growing labour market concerns by paraprofessional & trades – they had been more optimistic than the average and have now caught the more pessimistic managers & professionals. This is matched by rising job insecurity from those with higher education and mortgagors
As the mining sector starts to wind down its investment surge, and the domestic construction/manufacturing sectors servicing it start to feel the pinch, job insecurity has increased among both managers & professionals.
Interestingly labourers & operators have become a touch more optimistic, while the expectations of sales & clerical employees have deteriorated to meets those of labourers.
The level of the unemployment index, and the fact it is rising again, suggests the RBA still has room to cut rates further.
Consumers inflation expectations have also fallen this month to 2.2% year-on-year, well below a long-run average of just over 3%.