Workers happy, in the meantime

Employment confidence eased slightly during the December quarter with a small gain in workers' satisfaction with their lot offset by their growing expectation that the slowing economy will cause the job market to soften.

The Westpac McDermott Miller employment confidence index fell to 127.1 in the three months to December, down from 130.1 for the previous quarter.

A reading above 100 indicates more workers are positive about employment than are negative.

The survey's current employment conditions index rose 0.7 of a point to 146.3 over the period and its employment expectations index fell 5.2 points to 114.5, dragging the overall index lower.

Westpac chief economist Brendan O'Donovan said that although the survey showed employment confidence was coming under increased pressure as the economy slowed, for the most part workers remained optimistic about employment.

"The tightness of the labour market and strong wage growth are reflected in the more positive response to earnings compared with a year ago."

The unemployment rate sits at a record low of 3.4 per cent.

O'Donovan said workers were becoming less confident about future employment conditions.

"Although jobs are still widely perceived to be readily available, the net positive response has eased back to its lowest over the last year," he said.

"Furthermore, workers' confidence over expected earnings and job security are now at their lowest levels since the start of the survey in 2004, albeit still significantly positive."

O'Donovan said the squeeze on the export sector from the high dollar would take some time to dissipate, and declining business confidence and a softening in the construction sector pointed towards the labour market coming off the boil.

As usual, workers in metropolitan centres were more positive than their counterparts in secondary centres and rural areas and the gap between them widened further during the December quarter.

The metropolitan employment conditions index fell by just over one point to 131.1, the secondary centre index fell by 3.9 points to 125 and the rural index fell by 4 points to 124.7.