Speaking of a muddling economy, next week sees the release of the all-important monthly labour force data. While the monthly numbers on employment are notoriously volatile, they will be a vital update on the lay of the economic land. With the economy yet to get sustained traction towards stronger growth, the readings for full time and part time jobs plus unemployment will be vital to judgments of just how strong (weak) the economy really is.
Last month, there was a small fall in employment and the unemployment rate ticked up to a 12 month high of 5.9 per cent, while underemployment (people in work, but who want to work more hours) reached a record high. As the RBA noted this week, “the labour market has softened recently” which is presenting risks not only to the overall position of the economy, but also to the increasingly fragile housing market where debt serviceability is extremely vulnerable to higher unemployment.
