Australian Employment Preview: Forecasts from six major banks, a January rebound

Australia is set to report its January employment figures on Thursday, February 16 at 00:30 GMT and as we get closer to the release time, here are forecasts from economists and researchers at six major banks regarding the upcoming employment data.

Australia is expected to have added 20K jobs vs. -14.6K in December, while the unemployment rate is expected to remain steady at 3.5%.

ING

“After last month’s decline in part-time work, we will probably see that part of the survey moderate, combined with perhaps a smaller increase in full-time jobs of about 10K to deliver a total employment change of 15-20,000. If that is broadly right, we may see the unemployment rate edge up to 3.6% – still very low by historical standards.”

ANZ

“We will be watching the labour market results closely next week to confirm that the 15,000 drop in employment in December was a one-off. Our labour market outlook is still very strong through 2023 given elevated job vacancies and ongoing difficulty to find labour, though a turn in business conditions and very low business confidence may be an early sign the tide is turning here. We expect the unemployment rate to be steady at 3.5%.”

Westpac

“Our forecast 15K gain in employment is enough to hold the unemployment rate at 3.5%.”

SocGen

“We expect January labour-market data to show a slight rebound in employment  (15K) from the dip observed in December, which would mean that the underlying employment recovery momentum has continued despite the contraction seen at the end of last year. This likely gain should almost recoup the loss in December. We forecast unemployment and participation rates matching those in December, showing that labour-market conditions remain tight. The number of hours worked is also likely to have increased after contracting in November and December. In conclusion, labour-market data should confirm the growth in economic activity and inflation pressures from the labour market, which will support the RBA’s tightening campaign.”

Citibank

“Citi unemployment rate forecast; 3.5%, Previous; 3.5%; Citi employment change forecast; 5K, Previous; -14.6K; Citi participation rate forecast; 66.5%, Previous; 66.6%. Overall, risks to the labor force report are likely skewed to the downside. However, given the survey sample period and a larger than usual number of people on holidays, there’s a risk that the January LFS could be noisy.”

Wells Fargo

“Given the reopening of China's economy, we believe Australia's economy will avoid recession this year. And while the January labor market report won't be definitive, a solid report would nonetheless provide some reassurance that the soft patch seen late in 2022 is likely to be temporary. The consensus forecast is consistent with a solid labor market outcome for January, with employment expected to rebound by 20K and the unemployment rate forecast to remain steady at 3.5%. Such an outcome would, we believe, keep the RBA moving along its monetary tightening path in the immediate months ahead.”