Westpac said it expects Australia's May labour force data to show a bounce-back after April's data surprised materially to the downside, possibly due to extra holiday-related weakness tied to the survey's Easter timing, though the underlying trend is looking softer, according to a Friday report by the bank.

The bank said April's Labor Force Survey showed a decline in employment of 18,600 and a jump in the unemployment rate to a post-pandemic high of 4.5%, with much of the weakness possibly reflecting abnormal seasonality since the survey ran over the full Easter long weekend.

Westpac forecast a bounce-back in employment of 45,000 for May, with the participation rate edging back up to 66.8%, and the unemployment rate slipping to 4.4% from 4.5%, the report added.

While the employment forecast looks strong, it would only result in an average monthly gain of about 13,000 over April and May, below the 30,000 per month pace seen in the first few months of the year, the bank said.