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Monthly Leading Indicator of Employment - November 2022


The Monthly Leading Indicator of Employment (the Indicator) has fallen for the ninth consecutive month in November 2022. The Indicator’s fall this month is attributed to declines in four out of five Indicator components—particularly the US Yield Difference and the Westpac-Melbourne Institute Leading Index of Economic Activity.

The Indicator’s confirmed peak in February 2022 is signalling a slowdown in the annual growth rate of employment, to below its long-term trend rate of 1.9 per cent per annum in the near term. Cyclical employment has already peaked —lagging the Indicator by six months— having fallen for the third consecutive month in November 2022.

Levels of the Leading Indicator of Employment

Leading Indicator Report graph November 2022

Monthly Changes in Value of Leading Indicator*

  Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22
Change in Leading Indicator -0.135 -0.143 -0.193 -0.195 -0.172 -0.127

*monthly changes in standard deviations from the cyclical trend

Components of the Leading Indicator**

Series Contribution to Change in Leading Indicator
Contribution to Change in Leading Indicator
Contribution to Change in Leading Indicator
NBSC Purchasing Managers Index for Manufacturing Output in China (November 2022 release) 0.045 0.023 0.026
US Yield Difference 
(10-year vs. 3-month interest rates, November 2022 release)
-0.128 -0.108 -0.086
NAB Forward Orders Index (October 2022 release) -0.009 -0.004 -0.002
Westpac-Melbourne Institute Leading Index of Economic Activity (October 2022 release) -0.052 -0.054 -0.053
Westpac-Melbourne Institute Consumer Sentiment Index
(October 2022 release)
-0.05 -0.029 -0.011
Change in Leading Indicator: -0.195 -0.172 -0.127

**Note: The cyclical components of each series contribute to the monthly movements in the Indicator. Each series in the Indicator has the same weight of 20 per cent. The units of measurement for the contributions to change in the Indicator are monthly changes in the standard deviation from the long-term trend. NBSC stands for the National Bureau of Statistics of China.

Technical Notes

The Indicator is designed to give advance warning of turning points in ‘cyclical employment’ (i.e. the deviation of the centred one-year trend in employment from the centred six-year trend). The average lead time of the Indicator over the series (i.e. the time between a peak or trough in the Indicator and the corresponding peak or trough in cyclical employment) is over a year. A ‘turning point’ in the Indicator is said to be confirmed when there are six consecutive monthly movements in the same direction after the turning point. A fall (or rise) in the Indicator does not necessarily mean that the level of employment will immediately fall (or rise). Rather, it implies that after a lag, the growth rate of employment may fall below (or rise above) its centred six-year trend rate.

The Indicator is the average of the normalised and standardised cyclical elements of the five series in the table above, which have been shown to lead cyclical employment consistently over a long period. The cyclical components and the composite Indicator for previous months are subject to revision when new statistics are incorporated.

The date of the issue of the Indicator, and the labels for the x-axis of the chart, relate to the month the Indicator is released. The data used to derive the cyclical employment, however, are two months behind the release month for the Indicator. The data for the NBSC Purchasing Managers’ Index and US Yield Difference are one month behind their release dates, while data for the other three component series are two months behind their release dates.

Release Details

The Indicator is available on the Department of Employment and Workplace Relations website at approximately 2pm AEDT on the day of its release. The next issue is scheduled for release on Wednesday 14 December 2022.

Contact Officer

Dr Jenny Tran / Ms Kehan Zhao
Economic Analysis Section, Department of Employment and Workplace Relations
Email: leading.indicator@dewr.gov.au