DEEWR Monthly Leading Indicator of Employment - Latest Release
DEEWR's Monthly Leading Indicator of Employment (Indicator) has fallen for the seventeenth consecutive month in May. The Indicator confirms a slowdown in the pace of employment growth below its (revised) long-term trend of 2.2 per cent per annum. In May, three of the Indicator’s four components have contributed to the Indicator’s decline—the Dun and Bradstreet Employment Expectations Index, the Westpac-Melbourne Institute Leading Index of Economic Activity and the ANZ Newspaper Job Advertisements series. Cyclical employment has now fallen for the twelfth consecutive month.
Levels of the DEEWR Monthly Leading Indicator of Employment and Cyclical Employment
|
Dec 2008 |
Jan 2009 | Feb 2009 | Mar 2009 | Apr 2009 | May 2009 | |
|---|---|---|---|---|---|---|
*Standard deviations from the cyclical trend |
||||||
| Leading Indicator | 0.216 | 0.054 | -0.156 | -0.384 | -0.624 | -0.822 |
| Series | Percentage Change over the Year | Percentage Change over the Quarter | Percentage Change over the Month | Weights* (%) | |||
|---|---|---|---|---|---|---|---|
*Note: The cyclical components of each series, and not the monthly seasonally adjusted percentage changes shown above, contribute to the movements in the Leading Indicator. The weights are revised annually and the latest revision occurred in February 2009. |
|||||||
| ANZ Newspaper Job Ads (May 2009 release) | -58.9% | -28.0% | 3.1% | 53.1 | |||
| Dun and Bradstreet Employment Expectations (%pt change) (Year to September Quarter 2008 - April 2009 release) | -20.0%pts | -14.0%pts | -16.0%pts | 24.6 | |||
| Westpac-Melbourne Institute Leading Index of Economic Activity (April 2009 release) | -2.0% | -1.8% | -0.3% | 7.4 | |||
| Westpac-Melbourne Institute Consumer Sentiment Index (April 2009 release) | 6.0% | -2.3% | 8.3% | 14.9 | |||
Technical Notes
The DEEWR Leading Indicator of Employment is the average of the normalised and standardised cyclical elements of four series which have been shown to lead cyclical employment consistently over a long period.
The Leading Indicator is designed to give advance warning of turning points in “cyclical employment” (i.e. the deviation of the one-year trend in employment from the six-year trend). The average lead time of the Indicator over the series (i.e. the time between a peak or trough in the Indicator and the corresponding peak or trough in cyclical employment) is around nine months (or about twelve months if account is taken of the additional 12-month lag in the Dun and Bradstreet Employment Expectations Index), although it has varied over the past decade. A ‘turning point’ in the Indicator is said to be confirmed when there are six consecutive monthly movements in the same direction after the turning point. A fall (or rise) in the Indicator does not necessarily mean that the level of employment will subsequently fall (or rise). Rather, it implies that after a lag, the growth rate of employment may fall below (or rise above) its six-year trend rate of about 2.2 per cent a year.
The DEEWR Leading Indicator incorporates data lagged one year for the Dun and Bradstreet Employment Expectations series and the most up to date data for other series. This is based on econometric testing which revealed that the Dun and Bradstreet series had a longer lag.
The date of the issue of the DEEWR Leading Indicator of Employment, and the labels for the x-axis of the chart, relate to the month the Indicator is released. The data used to derive the cyclical employment chart line, however, are two months behind the Indicator release month.
Release Details
The DEEWR Leading Indicator is available on the Internet at approximately 2pm on the day of its release. The next issue of the DEEWR Leading Indicator is due for release on Wednesday 10 June 2009.
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