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Justin Smirk, Research Analyst at Westpac, suggests that a soft patch in Australian unemployment for early 2019 will lift it to 5.3%.

Key Quotes

“Unemployment fell to a six year low of 5% in September. If you look at the labour market holistically, the large monthly drop looks like survey volatility rather than a new lower trend (see “Australian Labour Force Survey; a robust update if you look through the volatility”). Nevertheless, it is our view that the labour market is sound and that unemployment has been trending down.”

“Westpac forecasts the unemployment rate to hold above 5% to end 2018 before a soft patch in the June quarter 2019 (due to both election uncertainties and correction to the 2017/2018 strong patch) will lift unemployment to 5.3%. Once past the soft patch, steady employment growth will take unemployment back down to 5.0% by end 2019 and 4.8% by end 2020.”