The Westpac McDermott Miller Employment Confidence Index (ECI) fell by 7.4 points to 98.3 in the September quarter. This is the first time since March 2021 that households have held 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 re-opening of the international border.”

“This measure often provides a lead on the direction of the unemployment rate. The latest reading suggests that unemployment will rise further over the remainder of this year.”

Confidence about households’ earnings growth fell slightly in the September quarter. This has remained at low levels since the Covid-19 shock, despite a lift in wage growth in the official statistics.

“We suspect that households remain mindful of the rising cost of living,” said Mr Gibbs. “Even those who have managed to secure a large pay rise may feel that they are still struggling to get ahead.”

“All age groups have experienced a drop in employment confidence since June 2023, with the largest drop recorded amongst those aged 30 to 49. Those aged 30 to 49 are now pessimistic at 94.1 ECI, a drop of 10.5 points from last quarter, and the lowest index score for this age group since September 2020. Employment confidence amongst young people aged 18 to 29 dropped 2.5 points to 101.8 ECI and amongst those aged 50 plus it dropped 7.8 points to 97.7 ECI,” observed Imogen Rendall, Market Research Director of McDermott Miller Limited. “Concerns across the age groups centre most strongly around job availability and future job opportunities, however the older age groups are also worried about their own personal job security over the coming year,” noted Ms Rendall.

A full description of the background and specifications of the survey are attached. The survey was conducted over 1-13 September 2023, with a sample size of 1,551. An index number over 100 indicates that optimists outnumber pessimists. The margin of error of the survey is 2.5%.

Acknowledgement

The Westpac McDermott Miller Employment Confidence Index is owned by McDermott Miller Limited. Westpac McDermott Miller should be acknowledged as the source when citing the Employment Confidence Survey and Index. Graphs supplied may be reproduced by the news media provided the Westpac McDermott Miller logo remains inset.

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