This driven by a drop in perceptions about the current availability of jobs
Employment confidence has fallen to its lowest level since June 2021, driven by a drop in
perceptions about the current availability of jobs, according to a new bank survey.
The latest Westpac McDermott Miller Employment Confidence Index fell 3.9 points to 105.6 in the June quarter, while households remained positive on balance about conditions in the labour market.
An index number of more than 100 indicates that optimists outnumber pessimists.
The biggest contributor to the fall in employment confidence was perceptions about the availability of jobs, which were down by 11 points to 14.6 in the June quarter.
“This measure often provides a lead on the direction of the unemployment rate,” said Michael Gordon (pictured above), Westpac senior economist. “The latest reading suggests that unemployment is on track to rise further from its lows over the course of this year.”
The June quarter also saw a dip in the confidence about households’ earnings growth as well as in expectations of an increase in the coming year. Both measures remained at historically low levels since the pandemic, despite a lift in wage growth in the official statistics.
“We suspect that households have an eye to the rising cost of living,” Gordon said. “Even those who have managed to secure a cost-of-living pay rise will feel like they’re having to run hard just to stand still.”
The survey results were fairly similar across age groups and income levels. One notable difference though was that lower-income workers were now more likely to report an increase in their earnings than last year (the minimum wage rose by 7.1% on April 1).
Across the regions, the results were more mixed, with some posting sharp declines, and others some modest gains. Perceptions about current job opportunities were down across all regions, while most of the variation was down to differing views on earnings growth and job security.
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