Australian data focus this week is the December jobs report - preview
Coming up on Thursday 18 January 2018 (due at 0030 GMT), Australian employment market report
National Australia Bank preview (bolding mine)
Australia's longest run of job creation since 1994 is set to continue with the market expecting +15k jobs m/m in December.
- NAB sees upside risks to this given solid job advertising trends on SEEK and by our own NAB Business Survey in November and are forecasting a bumper +35k employment print.
For the unemployment rate, NAB and the market expect this to be unchanged at 5.4%.
Sample rotation also seems to favor a strong print this month with the outgoing 1/8 of the sample having a lower tendency to be employed compared to the sample as a whole (employment to population ratio 61.8% compared to total sample 62.1%). If the incoming 1/8 is more in line with the existing sample then rotation alone could potentially add 10-15k jobs in the month.
While NAB expects an unchanged unemployment rate for this month, the trend is firmly lower in 2018.
- Trend employment growth currently exceeds the level needed to keep the unemployment rate unchanged and at +22k is enough for it drop 0.1 every 2-3 months.
- The most recent employment indicators suggest it could fall below the RBA's 5% NAIRU in 2018 - Job Vacancies this week were very strong
Our view of a continuing strong labour market is part of the reason why NAB sees the RBA hiking rates twice in the second half of 2018.