Economy slowing
The Reserve Bank has now confirmed that interest rates could be cut further if unemployment rises.
Hang on to your hats, then, because Roy Morgan's measure of 'real unemployment' just hit a 5-year high, following on from weakness in consumer confidence in the March quarter.
It's not a seasonally adjusted measure, and generally it's tended to be volatile, but still this is not a promising indicator.
Roy Morgan's underutilisation measure also jumped to 20.6 per cent this month.
More concerning still, perhaps, Roy Morgan's estimates suggest that despite the growing labour force fewer people were employed in March 2019 than a year earlier, almost entirely driven by less part-time employment.
As noted, this survey is more volatile than the 'official' ABS release, but even the smoothed chart below shows that this might well reflect a looming slowdown in hiring ahead.
Stay tuned
Tomorrow morning's release by the ABS thus becomes the most important of the month.
ABS figures from month to month can be quite volatile too, with economists' market forecasts ranging from +8,000 all the way up to +33,000 for total employment in March.
Similarly the market median forecast for an unemployment rate ticking up to 5 per cent masks a range of forecasts from 4.8 per cent at the low end up to 5.1 per cent.
Westpac is the most pessimistic forecaster on both the employment and unemployment measures, mirroring their dovish interest rate calls.
Westpac is the most pessimistic forecaster on both the employment and unemployment measures, mirroring their dovish interest rate calls.
Entirely new and different narratives could be constructed from those high/low forecasts, so definitely don't miss tomorrow's release.
I'll run through my normal analysis here (after I've got off my flight at least).
