1 Nov 2010

Key employment indicators due this week

6:19 pm on 1 November 2010

Economists hope this week's employment data will paint a clear picture of the state of the labour market.

Unemployment has swung sharply during the past two quarters, rising to 6.8% in the June quarter, after plunging to 6% in the first three months of the year.

The volatility led many economists to believe the figures might have been flawed.

The Labour Cost Index and Quarterly Employment Survey, which measure wage growth and hours worked, is due on Tuesday and the Household Labour Force Survey, which measures unemployment, is due on Thursday.

Westpac chief economist Brendon O'Donovan has his fingers crossed for clean data this quarter. Overall, he expects wage inflation to have jumped, but only a minor drop in the unemployment rate.

He says data from the Household Labour Force Survey shows the unemployment rate fell from 7.3% at the end of last year to 6% and then back up to 6.8%.

But Mr O'Donovan says there are problems with the survey because that is not what actually happened.

He says the survey has been a reliable indicator in the past.