The federal government’s Leading Indicator of Employment fell for the 16th month in a row in September, hinting at slowing economic conditions.
The index also recorded that cyclical employment fell for the second consecutive month, which the Department of Jobs and Small Business said suggested that “the employment growth rate could fall below the long-term trend rate of 2.4 per cent per annum in the near term”.
The leading indicator is seen as a forward-looking measure and is compiled from a diverse set of data including US government bond yields, Australian consumer sentiment and Chinese manufacturing activity.
The results recorded a contraction in four of the five components of the indicator, with “tighter financial conditions in the US, soft domestic consumer sentiment and business forward orders, and a weak outlook for prospective economic activity in Australia” being partially offset by an increase in the Purchasing Managers’ Index for manufacturing output in China.
The calculations released on Wednesday precede the release of August unemployment figures from the ABS on Thursday, numbers keenly awaited by analysts because a slowdown in job growth could spur further cuts to the cash rate by the Reserve Bank of Australia.