Unemployment likely to rise, Westpac says after confidence index takes a hit

Confidence about household earnings growth fell slightly in the September quarter in the Westpac McDermott Miller index. Picture / Steven McNicholl

A major bank economist says unemployment is likely to rise for the rest of the year.

The Westpac McDermott Miller employment confidence index fell in the September quarter.

This was the first time since March 2021 households had a negative view about conditions in the labour market, and the lowest reading for the index since December 2020.

“Workers are telling us that it is becoming harder to find jobs,” said Westpac senior economist Darren Gibbs.

“The lower perception of job availability likely reflects both the recent decline in new vacancies and increased competition for those vacancies since the reopening of the international border.”

He said the measure was often indicative of where unemployment was heading.

“The latest reading suggests that unemployment will rise further over the remainder of this year.”

Confidence about household earnings growth fell slightly in the September quarter but has been low for the survey since since the Covid-19 pandemic arrived.

The cost of living was likely playing a major role in these perceptions, Gibbs said.

“Even those who have managed to secure a large pay rise may feel that they are still struggling to get ahead.”

People aged 30 to 49 registered the biggest drop in employment confidence in the latest quarter.

“Concerns across the age groups centre most strongly around job availability and future job opportunities,” Imogen Rendall from management consultancy firm McDermott Miller said.

“However, the older age groups are also worried about their own personal job security over the coming year.”

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