Via Westpac, in brief:
- In regards to the recent floods in NSW and Qld, they came late in the month missing the February reference period. While there will be some impact in March, most of the impact will appear in hours worked with a modest temporary hit to employment.
- With all that was being thrown at Australians in January that participation held up should be seen as a positive for the Australian economy. We expect participation to lift from 66.2% to 66.4% for a 45k gain in the labour force. This will temper the fall in unemployment to just 0.1ppt to 4.1%. Why not a bigger jump in participation? The jump in participation to 66.4% will be a new record high. The previous high was 64.3% in March 2021. We are cautious about how far participation can be pushed in any one month these levels.
- The risk is for a small rise in participation and a larger fall in unemployment.
AUD/USD update:
