Unexpectations_bulletin_pack_September2013.pdf

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expectationsUnemployment expectationchart pack.

eptember


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-Consumer unemployment expectations

The unemployment expectations index fell 6.6% in Aug, the largestmonthly improvement (remembering that a fall in the index suggests

consumers are not expecting unemployment to rise as much as they. v .

Through the year to Aug, the index is now down 8.2% compared to a0.7%yr print in Jul and 3.2%yr print in Jun. Following two declines

and one flat print, over the last three months the trend index fell0.3% in Aug but is 20% higher than its long run average.

Des ite the im rovement the index is still ointin to a weaknear-term outlook for full-time employment and total hours worked.

We should note an interesting comparison to the Mar 1996 election;. , .But be aware that the index then jumped 27.1% in Apr 1996. Theimprovement in the index was very short lived.

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-Consumer unemployment expectations (cont)

ac n , managers pro ess ona s e e way w a ppimprovement. But labourers were not far behind with a 20ppt

improvement. This was, however, wiped out in the following,

labourers.

This month labourers led the way with a 22ppt improvement whileparapro ess ona ra es mprove pp s. anagersprofessionals improved just 7ppts. This group, more closelyassociated with hiring and firing decisions, is less optimistic. So we

Oct before we are convinced this is a trend improvement.

Expectations are improving in Sydney and Melbourne; WA is nowe mos pess m s c, u s no ar e n .

The level of the unemployment index is still consistent with arising unemployment rate and a lower cash rate.

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indexindex

180180

unemployment expectations

unemployment expectations trend

Sources: Westpac-MI

peak,Feb 09

160160 unemploymentexpected to rise

140140

100100 unem lo ment

8080Aug-88 Aug-93 Aug-98 Aug-03 Aug-08 Aug-13

expected to fall

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indexbps

180

400 annual change in unemployment rate smoothed (lhs)

unemployment expectations trend (rhs)

160200

unemploymentrising

140100

100-100

80-200Sep-88 Sep-93 Sep-98 Sep-03 Sep-08 Sep-13

falling

ources: , es pac conomcs,Melbourne Institute

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-bps tty% long run average

200

-60

unemploy. expectations (lhs leading 4mths)

change in employ/pop ratio (rhs) Sources: ABS, West ac Economics,

100-40

Melbourne Institute

050

-

0

-100

-5020

-150Sep-95 Sep-99 Sep-03 Sep-07 Sep-11

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-

-% 3mth% inverted

1.5

.

-20

-

*trend represented as deviation from 10 year averageSources: ABS, Westpac Economics,

Melbourne Institute

0.5

.

0

-0.5

0.020

-1.5

-1.040 unemploy. exp* (lhs leading 2mths)

trend full-time employ (rhs)

-2.060Sep-99 Sep-03 Sep-07 Sep-11

full-time employ(rhs)

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-% 3mth% deviation

1.5-30

-

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

1.0-10

0.0

.

10

-0.530

unemployment expectationstrend* (lhs leading 2mths)

-1.050Sep-99 Sep-03 Sep-07 Sep-11

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-% yr% long run average

5.0

-30

Sources: Westpac-MI, ABS

3.0

-10

-1.0

.

10

-3.0

30

unemploy. expectations (lhs leading 4mths)

-5.0Sep-95 Sep-99 Sep-03 Sep-07 Sep-11

hours worked %yr rhs

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-% 3mth% long run average

1.0

.

-40

-30

Sources: Westpac-MI, ABS

0.5-20

-10

-

0.0010

-1.0

.

30 unemploy. expectations* (lhs leading 1mth)

-1.550Sep-95 Sep-99 Sep-03 Sep-07 Sep-11

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indexindex Long run average = 100

140140working

unemploy/retired/not working

120120

100100

8080

6060Sep-01 Sep-04 Sep-07 Sep-10 Sep-13

Sources: Westpac-MI

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indexindex Unemployment expectations by occupation LR ave = 100

140140 manager/prof

labourer/operator

120120paraprof/trades

sales/clerical

100100

8080


Sources: Westpac-MI

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13


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140140

Primary

120120 Secondary

Trade

100100

8080


Sources: Westpac-MI

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140

150

140

150

Male Female

120

130

120

130

100110

100110

8080


Sources: Westpac-MI

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indexindex Unemployment expectations by family type LR ave = 100

140

150

140

150

Live with children


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indexindex Unemployment expect by household type LR ave = 100

140

150

140

150tenant

120

130

120

130mor gago

owned

100110

100110

8080


Sources: Westpac-MI

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indexindex Unemployment expectations by state LR ave = 100

140140 Sydney

120120Melbourne

Remaining cities

100100

8080


Sources: Westpac-MI

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140

150

140

150

NSW WA

120

130

120

130 Vic Qld

100110

100110

8080


Sources: Westpac-MI

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140140

urban

120120 rural

100100

8080


Sources: Westpac-MI

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-

-% 3mth% inverted

.

-40

-30

Sources: ABS, Westpac Economics,

Melbourne Institute

.-20

-10

0.0010

-1.030

unemploy. exp* (lhs)

*trend represented as deviationfrom 10 year average

-2.050Sep-98 Sep-02 Sep-06 Sep-10


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-% 3mth% inverted

.

-40

-30

*trend represented as deviation

from 10 year average


Melbourne Institute

.-20

-10

0.0010

-1.030 unemploy. exp* (lhs leading 2 mths)

-2.050Sep-98 Sep-02 Sep-06 Sep-10

ren u - me empoy r s

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-% 3mth% inverted

.

-40

-30

unemploy. exp* (lhs leading 2 mths)



Melbourne Institute

.-20

-10

1.0010

0.030

*trend represented as deviation

-1.050Sep-98 Sep-02 Sep-06 Sep-10


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-% 3mth% inverted

2.0

.

-40

-30


Melbourne Institute

1.0-20

-10

-

0.010

20*trend represented as deviation


-2.0

.30

40 unemploy. exp* (lhs leading 2 mths)

-3.060Sep-98 Sep-02 Sep-06 Sep-10

ren u - me empoy r s

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Index invert.bps

100

200When unemployment expectations improve, the

RBA tightens monetary policy

Sources: RBA, Westpac Economics,

Melbourne Institute

1200

140-200-100

When unemployment

expectation deteriorate, theRBA eases monetary policy

160

-400

-300 annual change in cash rate (lhs)

forecasts

-500Sep-01 Sep-04 Sep-07 Sep-10 Sep-13

unemployment expectations trend (rhs) Source: Westpac-MI

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%yrbps-

-32200When unemployment expectations

improve, the RBA tightens monetary policy

-

00

1632-200

-100 When unemploymentexpectation deteriorate, theRBA eases monetary policy

48

64-400

-300 annual change in cash rate (lhs)

forecasts

80-500Sep-01 Sep-04 Sep-07 Sep-10 Sep-13

change in expectations (rhs) Source: Westpac-MI

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Documents

Unexpectations_bulletin_pack_September2013.pdf