Employment and unemployment figures for January are out today, will they change the economic debate?
Probably not: conditions are slowing and if the number of people losing their job doesn’t increase in today’s February figures, then it will happen sooner rather than later.
There is a problem with the accuracy of the labour force figures: the size of the group of people quizzed is smaller because of budget cuts forced on the ABS.
But the figure to watch for will be the net job losses since the start of 2008: it was some 84,000 people in the 13 months from January last year.
Tuesday’s ANZ’s job ads figures for February told a gloomy story about the outlook for employment, as it has been doing for months now without much happening in the actual market.
But despite the flood of bad news on the economy, consumer confidence was to be expected: what was slightly surprising, the reported fall was small, tiny in fact, given the torrent of bad news about the economy here and offshore.
According to the March survey of consumer confidence from Westpac and the Melbourne Institute, there was a dip to 85.6 points from 85.8 points in February.
In view of the flow of news on the economy (worsening), jobs (ditto); higher petrol prices and no rate cut, that was slightly surprising.
But along with the NAB’s business confidence figures on Tuesday, confidence seems to be holding up at the moment (admittedly at, or near, recessionary levels), while business conditions and the outlook for jobs continues to worsen.
Building approvals have fallen, except for new homes as the first home buyers grants kick in: retail sales were stronger than expected in January and December as the stimulus package seemed to make shoppers spend more.
Housing finance figures for January out yesterday supported the growing impact of the first home buyers on building approvals. Housing finance was up (See next story) and first home buyers were a major part of the improvement.
Overall, the sentiment is still low and well in the area where pessimism outweighs optimism.
Consumer sentiment dipped in March amid ongoing fears about a recession and job losses.
In a statement, Westpac chief economist Bill Evans said the result was "surprisingly good" considering a flow of bad economic news from at home and abroad.
"Global economic conditions continued to deteriorate particularly with the surprisingly swift capitulation in Asia and news of the collapse of jobs in the US and a further 20 per cent fall in US share prices," Mr Evans said in a statement today.
Mr Evans said the small fall in sentiment could reflect a lagged response to positive developments in February.
"Recall that despite the announcement of the government’s $42 billion fiscal stimulus package and the one per cent fall in mortgage rates the index actually fell by 9.6 per cent in February," he said,
"At the time it appeared that job concerns and the global gloom had more than offset the positive initiatives coming from the fiscal and monetary authorities."
"The index has fallen by only 3.4 per cent over the last year compared to a fall of 23 per cent in the year to March 2008," he said.
"However, it has settled at a level which is almost 15 per cent below the long term average, and has hardly budged from its level in August 2008 prior to the Reserve Bank’s spectacular 400 basis point rate cut cycle."
