Decline in Australian unemployment in March confirms a trend improvement in expectations

The Westpac-Melbourne Institute Unemployment Expectations Index fell a further 2.5% in Mar following a 1.9% in Feb. The index has fallen in 9 of the last 12 months to be down 12.4% in the year.
 
Recall that a lower (higher) reading from the index indicates reduced (increased) concern around the labour market.

So far in 2015 households appear to be getting more positive about the labour market. Unemployment expectations are still high historically (about 15% higher than the long run average) but the trend in moving in the right direction. 

Westpac notes in a report on Wednesday:

• The ongoing improvement in expectations would be consistent with observing an improvement in employment relative to the pace of growth in the labour market.
• We have noted the level of unemployment expectations remains high but the trend is falling again which is a very promising sign.
  
  
• We have found that it is the change in expectations, rather than the level, that is the more important guide to any possible change to the stance of monetary policy. 
  
  
• The recent trend improvement in expectations suggests that the recent rate cut may have already had an impact on expectations. And the change in expectations would suggest we are nearing the end of the rate cutting cycle, at least for now. We will have to wait to see if it translates thought to real economic activity.
  
  
• Also the recent lift in Westpac's Jobs Index, back to its long run average, is also a promising sign. Should this continue we would expect that unemployment expectations also to improve (fall) over time.