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Category: Economic Trends / Unemployment

Economists forecast roughly steady unemployment

Thursday, 14 Apr 2016 07:57:20 | Liz Hobday

Economists are divided on whether unemployment will stay steady or rise slightly. (Rose Grant)

Economists are generally expecting unemployment to remain steady, or tick up just slightly, when the latest official data are released today.

The typical forecast among the 26 economists surveyed by Bloomberg is for the unemployment rate to edge up from 5.8 to 5.9 per cent, even though most expect the Bureau of Statistics survey to show around 17,000 jobs were added last month.

That is because most economists expect a bounce back in the participation rate - the proportion of people in work or looking for it.

NAB's chief economist Alan Oster expects the unemployment rate to remain roughly the same for March.

"Broadly, what we're seeing is strong underlying employment and probably unemployment staying around the same at 5.8 per cent," he said.

Divergent views on jobs outlook

Alan Oster also said there are still statistical issues around the jobs data, flowing on form the unusually strong growth recorded in the final quarter of 2015.

However, he believes the economy is consistently growing fast enough to create 20,000 jobs every month.

"That would be enough to see unemployment over the next six months or so dropping down to say 5.5 per cent," he said.

Unemployment data explained


ABC business reporter Michael Janda explains how the jobs data are calculated and what to look for in the figures.

Meanwhile, the Royal Bank of Canada is predicting a modest 8,000 jobs to be added for March, with growth reverting to a more realistic average, after the anomaly over the last few months of 2015.

The bank said the fourth quarter numbers looked out of line, even given the fact that GDP growth exceeded expectations during the period.

It is expecting a 0.2 percentage point rise in the unemployment rate to 6 per cent for March, with the figures to remain around that level for the rest of the year.

The bank's head of Australian and New Zealand fixed income strategy Su-Lin Ong said she expected the unemployment rate to rise in future.

"We're also looking for the unemployment rate to kick back up towards 6 per cent, in part reflecting a bit of a rise in participation so, overall, we think it's going to be a fairly modest report," she said.

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