Australian Employment Preview: Forecasts by major banks

Australia will release October’s employment report on Thursday, November 17 at 00:30 GMT and as markets draw closer to the release time, here are forecasts by analysts at five major banks regarding the upcoming awaited data.

Australia is expected to have added 15K positions in October versus 0.9K in September, with the unemployment rate seen rising a tick to 3.6%.


Westpac
“The 900 in employment in September was an increase of just 0.01%. Contrast that with a gain in the working age population of 0.08% and a 9.8K, or 0.07%, lift in the labour force. This left the participation rate flat at 66.6% and the unemployment rate flat at 3.5%. However, at two decimal points, it lifted from 3.48% to 3.54% so very close to rounding up to 3.6% while the employment-to-population ratio eased back to 64.22% from 64.27%. Given the rounding only just kept the unemployment rate at 3.5%, we would argue that September was a softer-than-expected update on the labour market. Holding participation flat in October, our forecast 15K gain in employment is not enough to prevent the unemployment rate from rounding up to 3.6%. We see there is a risk of a softer gain in employment in October while participation can remain robust, hence we see upside risk to our unemployment rate.”

SocGen
“We expect that MoM changes in employment will return to a sizeable gain in October (30K). It is true that the slowdown in consumption that was already confirmed by the sluggish real retail sales in Q3 also weighs on employment growth. However, it is natural to expect a gain in employment after a pause between June and September (a dip in July, a rebound in August and zero growth in September). The unemployment rate is likely to fall again to a historically low level of 3.4%, and the participation rate is expected to stay at a historically high level of 66.6%. Weekly hours worked should also return to healthy growth after the weakness in the previous months. The unemployment rate is likely to stay around the current level for a considerable period, as we expect only a relatively mild slowdown of economic activity.”

Citibank
“Australia October Labour Force Survey Citi employment forecast; 10K, Previous, 0.9k; Citi unemployment rate forecast; 3.5%, Previous; 3.5%; Citi participation rate forecast; 66.6%, Previous; 66.6% The labour market remains tight, however, there are early signs that it has started to loosen from its extremely tight levels earlier in the year. Sentiment indicators from businesses suggest labour hiring will continue over the coming months, but at a slower pace than what businesses had previously expected. Indeed, Citi Research’s view is that the unemployment rate will likely start rising in 20 23, up from 3.5% to 4.3%. However, there are risks that it could begin to do so little earlier.”

TDS
“We expect employment to fall by 10K. We expect the participation rate stayed elevated at 66.6% and for the unemployment rate to rise to 3.7% from 3.5% previously. Thus, the RBA Q4 forecast for unemployment at 3.4% looks increasingly unlikely to be realised as the job market softens towards year-end. We still look for the Board to continue with 25 bps hikes though the Bank is sounding more dovish, with Deputy Governor Bullock hinting that the Bank is getting closer to a pause in this hiking cycle.”

ANZ
“A weak report expected, with employment to fall 20K and unemployment to edge up to 3.6%.”