The ABS employment series has had so many hiccups recently that Westpac hasn’t even published a forecast for the employment data to be released on Thursday.
That means that old favourites and solid private sector indicators like the ANZ Job Ads series become vitally important in gauging the outlook for employment and the unemployment rate.
And today, some good news!
According to ANZ Chief economist Warren Hogan, the “modest improvement in ANZ job ads (+0.2%) in October is an encouraging sign that the pick-up in labour demand is continuing. In our view, this should feed into better employment growth outcomes and see the unemployment rate stabilise.”
Hogan noted the recent ABS employment series instability but said that “past relationships suggest this level of job advertising is consistent with employment growing at an annualised pace of just under 2%, more than the current pace of population growth.”
The Australian economy needs to create jobs to increase spending and circulation of cash through the economy in order to fortify the economic transition away from mining and towards other sectors, particularly construction.
On this, Hogan notes: “More broadly, the outlook for the economy is improving. The transition to non-mining drivers of growth appears to be occurring, if only gradually. Measured business capex intentions have strengthened.”
The economy is not overly strong, but rising employment is as close to a cure all as any economic medicine can be.