Westpac Inflation & Unemployment Expectations Chart Pack (July 2013)

download Westpac Inflation & Unemployment Expectations Chart Pack (July 2013)

of 30

  • date post

    29-Oct-2015
  • Category

    Documents

  • view

    256
  • download

    2

Embed Size (px)

Transcript of Westpac Inflation & Unemployment Expectations Chart Pack (July 2013)

  • Consumer expectations Inflation & unemployment expectation chart pack.

    July 2013

  • Westpac-Melbourne Institute Consumer unemployment expectations

    The unemployment expectations index eased in July falling

    3.6%mth following a 6.3% rise in June & a 5.4% rise in May. This has seen the annual pace of the index ease back to 3.2%yr from 4.9%yr in June and 1.9%yr in May. The annual growth rate was negative in April (0.5%yr) and March (6.5%yr).

    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.

    By city, the largest deterioration has occurred in the mining regions. In particular, WA is equal with Qld in being the most pessimistic about the labour market while NSW is now the most optimistic.

    2

  • Westpac-Melbourne Institute Consumer unemployment expectations (cont)

    In particular it is quite revealing there are growing labour market

    concerns by paraprofessional & trades - they had been more optimistic than the average and have now caught the more pessimistic managers & professional.

    As the mining sector starts to wind down its investment surge, and the domestic construction/manufacturing sectors servicing it feel the pinch, job insecurity has increased among both managers & professionals and labourers & operators. It is the sales & clerical employees that remain the most optimistic, relatively speaking.

    The level of the unemployment index suggests the pressure remains on the RBA to cut rates further. The fact that inflationary expectations remain well anchored suggests they have ample scope to do so should they decide it is necessary.

    3

  • Labour market concerns still trending higher

    80

    100

    120

    140

    160

    180

    200

    80

    100

    120

    140

    160

    180

    200

    Jul-88 Jul-93 Jul-98 Jul-03 Jul-08 Jul-13

    index index

    unemployment expectations

    unemployment expectations trend

    Sources: Westpac-MI

    unemployment

    expected to rise

    unemployment

    expected to fall

    peak,

    Feb 09

    4

  • suggesting rising unemployment

    80

    100

    120

    140

    160

    180

    200

    -200

    -100

    0

    100

    200

    300

    400

    Jul-88 Jul-93 Jul-98 Jul-03 Jul-08 Jul-13

    index

    annual change in unemployment rate smoothed (lhs)

    unemployment expectations trend (rhs)

    bps

    Sources: Westpac-MI

    unemployment

    rising

    unemployment

    falling

    5

  • ...& employment to lag population growth...

    -150

    -100

    -50

    0

    50

    100

    150

    200

    -80

    -60

    -40

    -20

    0

    20

    40

    Jul-95 Jul-99 Jul-03 Jul-07 Jul-11

    bps tty

    unemploy. expectations (lhs leading 4mths)

    change in employ/pop ratio (rhs)

    % long run average Sources: Westpac-MI, ABS

    6

  • ...as full-time employment fades...

    -1.5

    -1.0

    -0.5

    0.0

    0.5

    1.0

    1.5

    2.0 -30

    -20

    -10

    0

    10

    20

    30

    40

    50

    Jul-99 Jul-03 Jul-07 Jul-11

    % 3mth

    unemploy. exp* (lhs leading 2mths) trend full-time employ (rhs)

    % inverted Sources: Westpac-MI, ABS

    *trend represented as deviation from 10 year average

    7

  • ...holding back the overall labour market.

    -1.0

    -0.5

    0.0

    0.5

    1.0

    1.5 -40

    -30

    -20

    -10

    0

    10

    20

    30

    40

    50

    Jul-99 Jul-03 Jul-07 Jul-11

    % 3mth % deviation

    unemployment expectations trend* (lhs leading 2mths)

    trend total employment (rhs)

    Sources: Westpac-MI, ABS * represented as deviation from full history average

    8

  • Hours worked to continue to languish...

    -5.0

    -3.0

    -1.0

    1.0

    3.0

    5.0

    -50

    -30

    -10

    10

    30

    50

    Jul-95 Jul-99 Jul-03 Jul-07 Jul-11

    % yr

    unemploy. expectations (lhs leading 4mths)

    hours worked %yr (rhs)

    % long run average Sources: Westpac-MI, ABS

    9

  • ...due to some near term weakness.

    -1.5

    -1.0

    -0.5

    0.0

    0.5

    1.0

    1.5 -50

    -40

    -30

    -20

    -10

    0

    10

    20

    30

    40

    50

    Jul-95 Jul-99 Jul-03 Jul-07 Jul-11

    % 3mth

    unemploy. expectations* (lhs leading 1mth)

    trend hours worked (rhs)

    % long run average Sources: Westpac-MI, ABS

    10

  • Those working are getting more worried

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    Jul-00 Jul-03 Jul-06 Jul-09 Jul-12

    index index

    working

    unemploy/retired/not working

    Sources: Westpac-MI

    Long run average = 100

    11

  • Sales & clerical are the most optimistic

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

    index index

    manager/prof

    labourer/operator

    paraprof/trades

    sales/clerical

    Sources: Westpac-MI

    Unemployment expectations by occupation LR ave = 100

    12

  • Expectations similar by educational level

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

    index index

    Primary

    Tertiary

    Secondary

    Trade

    Sources: Westpac-MI

    Unemployment expectations by occupation LR ave = 100

    13

  • but males a touch more pessimistic

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    160

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    160

    Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

    index index

    Male Female

    Sources: Westpac-MI

    Unemployment expectations by occupation LR ave = 100

    14

  • but similar if they live with/without children

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    160

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    160

    Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

    index index

    Live with children

  • and home ownership.

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    160

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    160

    Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

    index index

    tenant

    mortgagor

    owned

    Sources: Westpac-MI

    Unemployment expect by household type LR ave = 100

    16

  • The south east cities are the most optimistic...

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

    index index

    Sydney

    Melbourne

    Remaining cities

    Sources: Westpac-MI

    Unemployment expectations by state LR ave = 100

    17

  • & WA the most pessimistic

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    160

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    160

    Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

    index index

    NSW WA

    Vic Qld

    Sources: Westpac-MI

    Unemployment expectations by state LR ave = 100

    18

  • as expectation deteriorate in rural areas.

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    60

    70

    80

    90

    100

    110

    120

    130

    140

    150

    Jul-01 Jul-04 Jul-07 Jul-10 Jul-13

    index index

    urban

    rural

    Sources: Westpac-MI

    Unemployment expectations by state LR ave = 100

    19

  • NSW full-time stronger than expectations

    -2.0

    -1.0

    0.0

    1.0

    2.0 -50

    -40

    -30

    -20

    -10

    0

    10

    20

    30

    40

    50

    Jul-95 Jul-99 Jul-03 Jul-07 Jul-11

    % 3mth

    unemploy. exp* (lhs)

    trend full-time employ (rhs)

    % inverted Sources: Westpac-MI, ABS

    *trend represented as deviation

    from 10 year average

    20

  • Vic expectations now diverging from employ

    -2.0

    -1.0

    0.0

    1.0

    2.0 -50

    -40

    -30

    -20

    -10

    0