Westpac has just released its Jobs Index, a composite of a number of relevant forward looking labour market indicators, which shows an increase to 49.2 in December from 48.5 the previous month.
This is consistent with labour market growth over the past six months at a pace of around 2%. But Justin Smirk, Westpac’s senior economist, added that, “this would be the peak,” and that pace will now ease.
He said the outlook for the index “is not only pointing moderation in the pace of recovery in the labour market, it is also hinting that should this trend continue we are also likely to see a deterioration in the unemployment expectations index.”
That’s bad news for Australia’s faltering recovery and no doubt underlies Westpac chief economist Bill Evans’ expectation that rates will be cut at next week’s February RBA board meeting.