Leading Indicator of Employment latest release

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February 2024


The Monthly Leading Indicator of Employment (the Indicator) has fallen for three consecutive months to February 2024, following three consecutive monthly rises to November 2023. Movements over the last six months have been noisy—they provide no new definitive direction for the employment outlook (see Technical Notes on page 2).

There was a confirmed peak in the Indicator in March 2022, indicating that employment growth will slow down to below its long-term trend rate of 3.0 per cent per annum after an average lag of 12–18 months.

Levels of the Leading Indicator of Employment & Cyclical Employment

Chart of the Levels of Leading Indicator of Employment & Cyclical Employment. For details, read the preceding paragraphs.

Monthly Changes in Value of Leading Indicator*

  Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24
Change in Leading Indicator  0.097  0.114  0.049 -0.011 -0.034 -0.050

*monthly changes in standard deviations from the cyclical trend. – Back to Monthly Changes in Value of Leading Indicator

Components of the Leading Indicator**

Series Contribution to Change in Leading Indicator
Contribution to Change in Leading Indicator
Contribution to Change in Leading Indicator
China’s Purchasing Managers Index for Manufacturing Output (February 2024 release) -0.015 -0.017 -0.014
US Yield Difference
(10-year vs. 3-month interest rates, February 2024 release)
 0.003 -0.012 -0.018
NAB Forward Orders Index
(January 2024 release)
-0.019 -0.026 -0.037
Westpac-Melbourne Institute Leading Index of Economic Activity
(January 2024 release)
-0.004 -0.002 -0.003
Westpac-Melbourne Institute Consumer Sentiment Index
(January 2024 release)
 0.024  0.023  0.022
Change in Leading Indicator: -0.011 -0.034 -0.050

**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. – Back to Components of the Leading Indicator

Technical Notes

The Indicator is designed to provide advance warnings 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 the previous months are subject to revision when new monthly data become available.

Movements in the individual components of the Indicator are not fundamentally significant—and therefore no commentary on the relative importance of each component is made—until a confirmed turning point in the Indicator occurs.

Release Details

The Indicator is available on the Department of Employment and Workplace Relations website. The March issue is scheduled for release on Wednesday 20 March 2024.

Contact Officers

Mr Lachlan Kerwood-McCall / Mr Kerry Guan
Economic Analysis Section, Department of Employment and Workplace Relations
Email: leading.indicator@dewr.gov.au