Expectations Bulletin Pack (3)

7/28/2019 Expectations Bulletin Pack (3)

1/31

ConsumerexpectationsInflation & unemploymentexpectation chart pack.

June 2013


2/31

Inflation expectations remain well anchored

4

5

6

7

4

5

6

7 % ann% ann

trend median

0

1

2

3

0

1

2

3

Jun-97 Jun-01 Jun-05 Jun-09 Jun-13

2


3/31

Expectations still well below longer run average

4

5

6

7

4

5

6

7 % ann% ann

CPI

professionals trend

consumers trend

Spike higherpre GST

introduction

A realinflation spike

Carbon priceboost very

small

-1

0

1

2

3

-1

0

1

2

3

Jun-98 Jun-01 Jun-04 Jun-07 Jun-10 Jun-13

Sources: ABS, Westpac Economics, Melbourne Institute

3


4/31

Still a less than usual looking for price rises

4

5

6

7

80

90

100

% ann%CPI (rhs)

net balance (lhs)*

average since1995

*% expecting prices to riseminus % expecting prices to fall

-1

0

1

2

3

40

50

60

70

May-98 May-01 May-04 May-07 May-10 May-13

Sources: ABS, Westpac Economics, Melbourne Institute

4


5/31

Labour market concerns surge back

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


unemployment

expected to fall

5


6/31

suggesting unemployment can still rise

160

180

200

200

300

400

indexannual change in unemployment rate smoothed (lhs)

unemployment expectations trend (rhs)

bps

unemploymentrising

80

100

120

140

-200

-100

0

100


Sources: Westpac-MI

unemployment

falling

6


7/31

...& employment to lag population growth...

100

150

200

250-60

-40

-20

bps tty

unemploy. expectations (lhs leading 4mths)

change in employ/pop ratio (rhs)

% long run averageSources: Westpac-MI, ABS

-150

-100

-50

0

500

20

40


7


8/31

...as full-time employment fades...

0.5

1.0

1.5

2.0-30

-20

-10

0

% 3mth% invertedSources: Westpac-MI, ABS

*trend represented as deviation from 10 year average

-1.5

-1.0

-0.5

0.010

20

30

40

50

Jun-99 Jun-03 Jun-07 Jun-11

unemploy. exp* (lhs leading2mths)trend full-time employ (rhs)

8


9/31

...holding back the overall labour market.

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

50Jun-99 Jun-03 Jun-07 Jun-11

unemployment expectationstrend* (lhs leading 2mths)

trend total employment (rhs)

9


10/31

Hours worked to continue to languish...

3.0

5.0

-50

-30

-10

% yr% long run averageSources: Westpac-MI, ABS

-5.0

-3.0

-1.0

.10

30

50


unemploy. expectations (lhs leading 4mths)

hours worked %yr (rhs)

10


11/31

...as they moderate in the very near term.

0.5

1.0

1.5-50

-40

-30

-20

-10

% 3mth% long run averageSources: Westpac-MI, ABS

-1.5

-1.0

-0.5

0.00

10

20

30

40

50


unemploy. expectations* (lhs leading 1mth)

trend hours worked (rhs)

11


12/31

Same for employed & 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


Sources: Westpac-MI

12


13/31

Now only sales have some optimism

120

130

140

150

120

130

140

150 indexindex

manager/prof

labourer/operator

paraprof/trades

sales/clerical

Unemployment expectations by occupation LR ave = 100

60

70

80

90

100

60

70

80

90

100


Sources: Westpac-MI

13


14/31

Expectations similar by educational level

120

130

140

150

120

130

140

150 indexindex

Primary

Tertiary

Secondary

Trade


60

70

80

90

100

60

70

80

90

100


Sources: Westpac-MI

14


15/31

by gender

120

130

140

150

160

120

130

140

150

160 indexindex

Male Female


60

70

80

90

100

110

60

70

80

90

100

110


Sources: Westpac-MI

15


16/31

if they live with/without children

120

130

140

150

160

120

130

140

150

160 indexindex

Live with children


17/31

and home ownership.

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


Sources: Westpac-MI

17


18/31


19/31

as things deteriorate in the mining states

120

130

140

150

160

120

130

140

150

160 indexindex

NSW WA

Vic Qld

Unemployment expectations by state LR ave = 100

60

70

80

90

100

110

60

70

80

90

100

110


Sources: Westpac-MI

19


20/31

and in the rural areas.

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


Sources: Westpac-MI

20


21/31

Job worries keep the pressure on rates

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


annual change in RBA cash rate (lhs)

forecasts

unemployment expectations trend (rhs) Source: Westpac-MI

When unemploymentexpectation deteriorate, theRBA eases monetary policy

21


22/31

as the pace of decline starts to accelerate.

-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


annual change in RBA cash rate (lhs)

forecasts

change in expectations (rhs) Source: Westpac-MI

When unemploymentexpectation deteriorate, theRBA eases monetary policy

22


23/31


24/31


25/31

NSW full-time stronger than expectations

1.0

2.0-50

-40

-30

-20

-10


-2.0

-1.0

0.00

10

20

30

40

50

Dec-94 Dec-98 Dec-02 Dec-06 Dec-10

unemploy. exp* (lhs)

trend full-time employ (rhs)

*trend represented as deviationfrom 10 year average

25


26/31

NSW hours worked still quite weak

2.0

3.0

4.0

5.0

6.0-50

-40

-30

-20

-10

% yrunemploy. exp* (lhs leading 2 mths)


% invertedSources: Westpac-MI, ABS

-4.0

-3.0

-2.0

-1.0

0.0

1.00

10

20

30

40

50

Nov-96 Nov-00 Nov-04 Nov-08 Nov-12


26


27/31

Vic expectations now diverging from employ

1.0

2.0-50

-40

-30

-20

-10



-2.0

-1.0

0.00

10

20

30

40

50

Oct-97 Oct-01 Oct-05 Oct-09

unemploy. exp* (lhs leading 2 mths)

trend full-time employ (rhs)

27


28/31

Vic hours weaker than expectations

3.0

4.0

5.0

6.0-50

-40

-30

-20

-10

% yr% invertedSources: Westpac-MI, ABS


-2.0

-1.0

0.0

1.0

2.00

10

20

30

40

50

Nov-96 Nov-00 Nov-04 Nov-08 Nov-12



28


29/31

Qld expectations still very weak

2.0

3.0-50

-40

-30

-20

-10


-1.0

0.0

1.00

10

20

30

40

50

Oct-98 Oct-02 Oct-06 Oct-10


trend full-time employ (rhs)*trend represented as deviationfrom 10 year average

29


30/31

Qld expectations still very weak

4.0

6.0

8.0-50

-40

-30

-20

-10

% yrunemploy. exp* (lhs leading 3 mths)


% inverted

-4.0

-2.0

0.0

2.00

10

20

30

40

50


Sources: Westpac-MI, ABS


30


31/31

WA expectations much weaker than jobs

1.0

2.0

3.0-50

-40

-30

-20

-10


-3.0

-2.0

-1.0

0.010

20

30

40

50

60



trend full-time employ (rhs)*trend represented as deviationfrom 10 year average

31

Documents

Expectations Bulletin Pack (3)