It probably goes without saying, but if you’re feeling pretty good about your job security, you’re likely to be feeling pretty confident too.
Here’s proof of its importance.
From today’s Westpac-MI consumer sentiment survey for October, it’s a brilliant chart from the Commonwealth Bank showing the relationship between job security fears and overall confidence levels.
The green line shows the unemployment expectations subindex in the consumer survey.
It fell to a four-year low in October, indicating that more people expect Australia’s unemployment rate to fall in the year ahead.
According to figures from the Australian Bureau of Statistics (ABS), 251,000 Australians found work in the six months to August, the largest increase over a comparable period since July 2000.
Making that figure even more impressive, the vast majority of those jobs have been full-time, averaging 35,300 per month over the same period.
In June and July, the cumulative six-month increase in full-time employment has come in above 200,000, the fastest pace of growth in the near 40-year history of the labour force survey.
Given those numbers, it’s easy to see why job security fears are easing.
And with those concerns ebbing, overall confidence levels have improved, rising to the highest level since October last year.
Obviously there are other considerations involved such as global economic conditions, expectations for the domestic economy and the outlook for the housing market, but the improvement in both indicators shows that confidence towards your job helps to boost overall sentiment levels.
Of course, consumer sentiment is still fairly depressed, remaining below historic norms thanks in part to ongoing concerns surrounding household finances.
Given that the jobs market is heating up, one suspects that a meaningful lift in wage growth will be required to see confidence levels push back to levels seen in previous years.
They’re expected to lift modestly in the years ahead, although, as many Australians already know, that’s been heard before, and frequently, in previous years.
The reality has been quite the opposite.
NOW READ: Australia’s jobs market is running hot, but it still may not be enough to boost the broader economy
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