By Chris Zappone
December's job figures are projected to narrow, reflecting the softening of the labour market and a weakening economy.
National employment, in trend terms, is forecast to edge down to a 1.4% year-on-year growth in December, down from 1.6% in November, according to the Manpower-Melbourne Institute monthly employment report released today, two days before the official monthly employment numbers are released, which are expected to confirm the downward trend.
The jobs market, crucial to keeping the domestic economy chugging along through a period of reduced activity, is seen slowing further in the new year, with annualised growth figures slated to dip again to 1.3% in January and to 1.1% in February, the report said.
"Although there is positive growth, year on year, this growth is actually slowing down,'' said Michael Chua of the Melbourne Institute.
Analysts will get a more accurate picture of the jobs market when official ABS unemployment figures for December are released on Thursday.
Economists foresee the economy shedding 20,000 jobs and the jobless rate rising to 4.5%, up from 4.4% in November as a slackening pace of business triggers more positions to be trimmed.
In recent months, financial firms ANZ Bank and GE Money said they will cut staff. GM Holden, Don smallgoods and Qantas also announced retrenchments in the second half of last year, providing more signs of a rockier job market.
Within the states, NSW, with significant exposure to the financial services industry, is expected to lose jobs in the coming months, the Melbourne Institute report said.
The trend number is forecast to be flat in NSW in December from 0.4% growth in November, according to the Melbourne Institute, while it is predicted to shrink 0.2% in January and 0.3% in February.
"If you look at NSW we are actually expecting a year-on-year contraction in that state,'' Dr Chua said.
Victoria's trend growth is expected to be anaemic, shrinking from 0.3% in December, to 0.2% in January to 0.1% in February as the economy cools down, consumer demand drops and business put expansion plans on hold.
The monthly employment report compares Australian Bureau of Statistics data from last month to a year ago to derive a forecast of employment growth in trend terms.
Joblessness is becoming a central feature of the slowdown afflicting the global economy.
Unemployment in the US reached a 16-year high of 7.2% this week, as the world's largest economy struggles with plunging consumer activity, retail sales and economic growth.
Australia's gross domestic product grew by 0.1%, seasonally adjusted, in the September quarter, the weakest pace since December 2000.
Recent drops in housing approvals and a halving of the surplus has prompted several analysts to mark down expectations for fourth quarter GDP growth, with some economists pencilling in a contraction for the final three months of last year.