• The latest update of the Westpac Jobs Index paints a picture of an improving labour market.
• There are many business surveys out there and most have questions that are applicable to the labour market. To generate a broad and deep labour market indicator, Westpac compiles all the relevant indicators from these surveys into the proprietary Westpac Jobs Index.
• At 52.0 in Jun (it was 51.3 in May), the Jobs Index is now at the highest level seen since Jun 2010. The recent low was 49.0 on Jun 2015. The Index is set so the long run average equals 50 but historically the index has to drop below 45 before it is associated with negative annual employment growth. On average, an economy grows and so too does employment so 50 should represent trend growth.
Good news even if it doesn’t really jell with job ads right now which are going the other way:
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
