Chart of the Day: Labour market softening

Job creations have eased.

DBS Group Research noted:

The final outcome for the third quarter unemployment rate will be announced this Friday. The previous estimate is for a reading of 1.9% sa. We don’t think that will change much with upcoming announcement.

This has led to the argument that despite the weak growth, the unemployment rate has remained low and the labour market has been tight. So the economy is still churning along well. Well, we think that’s probably true for now but it will not be the case six months down the road.

Note that the labour market typically lags behind the GDP growth cycle by about 2-3 quarters. And cracks are beginning to show in the labour market. Job creations have eased and the ratio of vacancy to unemployed person has dipped below one, implying that there is not more unemployed person than jobs in the market.