The latest NAB business survey, released on Tuesday, revealed that Australia’s labour market has continued to soften.
As illustrated in the following charts from Justin Fabo at Antipodean Macro, reported hiring by Australian businesses declined in August to be around average:
The trend rise in capacity utilisation also points to an ongoing rise in the unemployment rate:
The Westpac-Melbourne Institute consumer sentiment survey, also released on Tuesday, showed that household unemployment expectations jumped higher in August:
The above data follows the deterioration across the various measures of job ads and vacancies:
All measures have fallen sharply, with variations likely related to methodological differences and changes in market share.
The latest Statement of Monetary Policy from the Reserve Bank of Australia (RBA) projected a year-end unemployment rate of 4.3%, versus 4.2% currently:
Source: RBA August Statement on Monetary Policy
Based on the above data, the unemployment rate is at risk of significantly exceeding the RBA’s projection.
Indeed, a sharper-than-projected rise in the unemployment rate is the critical factor that could deliver a rate cut before the end of the year.
