The rate of employment growth has slowed over recent months as the strong momentum of job creation in 2015 faded.
But Westpac senior economist Justin Smirk says that “the latest update of the Westpac Jobs Index continues to paint a picture of a constructive labour market”.
Westpac’s job index is an agglomeration of the various employment sub-indexes contained in a number of Australian business surveys. Westpac then compiles all the relevant indicators from these surveys into its Jobs Index.
The good news for local job seekers, Smirk says, is that “at just above 52.1 in May…the Jobs Index is now at the highest level seen since Jun 2010”.
At 52.1 the index is above the 50 level at which Westpac has calibrated the index to the long run rate of employment growth in the economy. That means it’s not just a constructive employment market but equally that jobs growth should continue to grow at above average levels.
That “is pointing to employment growth picking up from its current 2.1%yr pace as we head into the Dec quarter”, Smirk said.
But in a nod to the notorious volatility in the ABS employment series, he added that “given the recent surge to almost 3%yr, it is likely that there could be some near-term underperformance in the way of statistical give back in employment growth”.