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7/30/2019 Expectations Bulletin Pack (2)
1/23
7/30/2019 Expectations Bulletin Pack (2)
2/23
Inflation expectations trending below 2%yr
4
5
6
7
4
5
6
7 % ann% ann
trend median
0
1
2
3
0
1
2
3
Nov-96 Nov-00 Nov-04 Nov-08 Nov-12
2
7/30/2019 Expectations Bulletin Pack (2)
3/23
No sign of a carbon price spike in expectations
4
5
6
7
4
5
6
7 % ann% ann
CPI
professionals trend
consumers trend
Spike higherpre GST
introduction
A realinflation spike
Carbon priceboosted expt.
to trend
-1
0
1
2
3
-1
0
1
2
3
Nov-97 Nov-00 Nov-03 Nov-06 Nov-09 Nov-12
Sources: ABS, Westpac Economics, Melbourne Institute
3
7/30/2019 Expectations Bulletin Pack (2)
4/23
Spread of expectations continues to narrow
4
5
6
7
80
90
100
% ann%
CPI (rhs)
net balance (lhs)
Net balanceaverage since
95
The net balance is theshare of those who
think prices are risingless the share of those
thinking prices arefalling.
-1
0
1
2
3
40
50
60
70
Nov-97 Nov-00 Nov-03 Nov-06 Nov-09 Nov-12
Sources: ABS, Westpac Economics, Melbourne Institute
4
7/30/2019 Expectations Bulletin Pack (2)
5/23
Labour market concerns ease a little
160
180
200
160
180
200 indexindexunemployment expectations
unemployment expectations trend
Sources: Westpac-MI
unemploymentexpected to rise
peak,Feb 09
80
100
120
140
80
100
120
140
Nov-87 Nov-92 Nov-97 Nov-02 Nov-07 Nov-12
unemployment
expected to fall
5
7/30/2019 Expectations Bulletin Pack (2)
6/23
7/30/2019 Expectations Bulletin Pack (2)
7/23
7/30/2019 Expectations Bulletin Pack (2)
8/23
...but a bottoming in total employment.
1.0
1.5-40
-30
-20
-10
% 3mth% deviationSources: Westpac-MI, ABS* represented as deviation from full history average
-1.0
-0.5
0.0
.10
20
30
40
50Nov-98 Nov-02 Nov-06 Nov-10
unemployment expectations trend* (lhsleading 2mths)trend total employment (rhs)
total employment (rhs)
8
7/30/2019 Expectations Bulletin Pack (2)
9/23
Unemployment expect. track hours worked...
3.0
5.0
7.0-30
-20
-10
0
% yr% inverted*represented as deviation from 10 year average
-5.0
-3.0
-1.0
1.010
20
30
40
50
Nov-97 Nov-01 Nov-05 Nov-09
unemploy. expectations 3mth ave*(lhs leading 3mths)
hours worked %yr (rhs)
Sources: Westpac-MI, ABS
9
7/30/2019 Expectations Bulletin Pack (2)
10/23
...pointing to further near term weakness.
0.5
1.0
1.5-35
-25
-15
-5
% 3mth% inverted*represented as deviation from 10 year average
-1.5
-1.0
-0.5
0.015
25
35
45
55
Oct-97 Oct-01 Oct-05 Oct-09
unemploy. expectations 3mth ave* (lhs leading 2mths)
trend hours worked (rhs)
Sources: Westpac-MI, ABS
10
7/30/2019 Expectations Bulletin Pack (2)
11/23
Job sentiment weakest in those not working
120
130
140
150
120
130
140
150 indexindex
working
unemploy/retired/not working
Long run average = 100
60
70
80
90
100
60
70
80
90
100
Nov-99 Nov-02 Nov-05 Nov-08 Nov-11
Sources: Westpac-MI
11
7/30/2019 Expectations Bulletin Pack (2)
12/23
Paraprofessionals/trades most optimistic
120
130
140
150
160
120
130
140
150
160 indexindexmanager/prof
labourer/operator
paraprof/trades
sales/clerical
Unemployment expectations by occupation LR ave = 100
60
70
80
90
100
110
60
70
80
90
100
110
Nov-99 Nov-02 Nov-05 Nov-08 Nov-11
Sources: Westpac-MI
12
7/30/2019 Expectations Bulletin Pack (2)
13/23
Workers in primary sector most nervous
120
130
140
150
160
110
120
130
140 indexindex
Primary Tertiary
Secondary Trade
Unemployment expectations by occupation LR ave = 100
60
70
80
90
100
110
60
70
80
90
100
Nov-99 Nov-02 Nov-05 Nov-08 Nov-11
Sources: Westpac-MI
13
7/30/2019 Expectations Bulletin Pack (2)
14/23
Expectations similar by gender
120
130
140
150
160
120
130
140
150
160 indexindex
Male Female
Unemployment expectations by occupation LR ave = 100
60
70
80
90
100
110
60
70
80
90
100
110
Nov-99 Nov-02 Nov-05 Nov-08 Nov-11
Sources: Westpac-MI
14
7/30/2019 Expectations Bulletin Pack (2)
15/23
Similar with or without children
120
130
140
150
160
120
130
140
150
160 indexindex
Live with children
7/30/2019 Expectations Bulletin Pack (2)
16/23
Household type reveals little variation
120
130
140
150
160
120
130
140
150
160 indexindex
Tenant
Mortgagor
Owned
Unemployment expect by household type LR ave = 100
60
70
80
90
100
110
60
70
80
90
100
110
Nov-99 Nov-02 Nov-05 Nov-08 Nov-11
Sources: Westpac-MI
16
7/30/2019 Expectations Bulletin Pack (2)
17/23
Other cities have now passed Syd & Melb
120
130
140
150
160
120
130
140
150
160 indexindex
Sydney
Melbourne
Remaining cities
Unemployment expectations by state LR ave = 100
60
70
80
90
100
110
60
70
80
90
100
110
Nov-99 Nov-02 Nov-05 Nov-08 Nov-11
Sources: Westpac-MI
17
7/30/2019 Expectations Bulletin Pack (2)
18/23
as the labour market unravels in Qld & WA
140
160
140
160
indexindex
NSW WA
Vic Qld
Unemployment expectations by state LR ave = 100
60
80
100
60
80
100
Nov-99 Nov-02 Nov-05 Nov-08 Nov-11
Sources: Westpac-MI
18
7/30/2019 Expectations Bulletin Pack (2)
19/23
Urban households now a bit more nervous
120
130
140
150
120
130
140
150 indexindex
Urban
Rural
Unemployment expectations by state LR ave = 100
60
70
80
90
100
60
70
80
90
100
Nov-99 Nov-02 Nov-05 Nov-08 Nov-11
Sources: Westpac-MI
19
7/30/2019 Expectations Bulletin Pack (2)
20/23
Level of job worries = an easing cycle
80
100
1200
100
200
300 Index invert.bps
When unemployment expectations improve, theRBA tightens monetary policy
140
160
180
-500
-400
-300
-200
-100
Oct-00 Oct-03 Oct-06 Oct-09 Oct-12
annual change in RBA cash rate (lhs)
forecasts
unemployment expectations trend (rhs) Source: Westpac-MI
When unemploymentexpectation deteriorate, theRBA eases monetary policy
20
7/30/2019 Expectations Bulletin Pack (2)
21/23
as does the pace of change in expectations.
-48
-32
-16
00
100
200
300 %yrbpsWhen unemployment expectations
improve, the RBA tightens monetary policy
16
32
48
64
80-500
-400
-300
-200
-100
Nov-00 Nov-03 Nov-06 Nov-09 Nov-12
annual change in RBA cash rate (lhs)
forecasts
change in expectations (rhs) Source: Westpac-MI
When unemploymentexpectation deteriorate, the
RBA eases monetary policy
21
7/30/2019 Expectations Bulletin Pack (2)
22/23
Westpac Institutional Bank is a division of Westpac Banking Corporation ABN 33 007 457 141.Information current as at date above. This information has been prepared without taking account of your
objectives, financial situation or needs. Because of this you should, before acting on this information,consider its appropriateness, having regard to your objectives, financial situation or needs. Westpacsfinancial services guide can be obtained by calling 132 032, visiting www.westpac.com.au or visiting anyWestpac Branch. The information may contain material provided directly by third parties, and while suchmaterial is published with permission, Westpac accepts no responsibility for the accuracy orcompleteness of any such material. Except where contrary to law, Westpac intends by this notice toexclude liability for the information. The information is subject to change without notice and Westpac is
DisclaimerDisclaimer
later date. Westpac Banking Corporation is registered in England as a branch (branch numberBR000106) and is authorised and regulated by The Financial Services Authority. Westpac EuropeLimited is a company registered in England (number 05660023) and is authorised and regulated by TheFinancial Services Authority. If you wish to be removed from our e-mail, fax or mailing list please send ane-mail to [email protected] or fax us on +61 2 8254 6934 or write to Westpac Economics atLevel 2, 275 Kent Street, Sydney NSW 2000. Please state your full name, telephone/fax number andcompany details on all correspondence. 2011 Westpac Banking Corporation. Past performance is not a
reliable indicator of future performance. The forecasts given in this document are predictive in character.Whilst every effort has been taken to ensure that the assumptions on which the forecasts are based arereasonable, the forecasts may be affected by incorrect assumptions or by known or unknown risks anduncertainties. The ultimate outcomes may differ substantially from these forecasts.
22
7/30/2019 Expectations Bulletin Pack (2)
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