There's now little doubt that Australia's jobs market is slowing

MARCO BERTORELLO/AFP/Getty Images
  • Australian job advertisements fell heavily in June, according to the ANZ Job Ads Index.
  • Job ads in its series have now fallen in four of the past six months, seeing the annual increase slow to a near two-year low of 6.9%.
  • The result fits with the moderation in Australian employment growth in 2018.

Australian job advertisements fell heavily in June, pointing to the likelihood of slower hiring in the months ahead.

According to ANZ Bank’s Job Ads Index, total advertisements slumped by 1.7% to 175,660 in seasonally adjusted terms, completely reversing a 1.4% increase reported in May.

It was the fourth decline in the ANZ survey in the past six months, seeing growth over the past year slow to 6.9%, the weakest result in close to two years.

The chart below from ANZ suggests that after a solid recovery since 2014, the trend in job ads is now starting to roll over.

ANZ Bank

The moderation in annual growth in advertisements also fits with the slowdown in employment growth seen in 2018.

“The weakness for June indicates that the loss of momentum evident in employment growth this year will likely continue for some month,” said David Plank, head of Australian Economics at ANZ.

“Further weakness over the next few months would be of significant concern and would potentially point to a lift in the unemployment rate.”

However, despite the moderation in job adds this year, Plank stresses that does not automatically imply that Australian unemployment will soon start to increase.

“It is important to note that job ads are still at a level consistent with continued jobs growth, just at a much lower level than occurred during 2017,” he says.

“This does not rule out a further decline in the unemployment rate, though progress on this front is likely to be slow.”

Australia’s unemployment rate fell to a six-month low of 5.4% in May as a large number of Australians left the labour market.

Plank suggests other labour market indicators such as business conditions, consumer sentiment and ABS job vacancies all continue to point to a positive outlook for employment.

The ANZ Job Ads Index was in stark contrast to job vacancies data released by the ABS last week which revealed openings rose by 4.6% to 234,20 in the three months to May, leaving the increase on a year earlier at a mammoth 21.4%.

In contrast to the ABS survey which interviews 5,400 employers every quarter, the ANZ measure uses data from Seek.com.au and the Department of Employment’s Australian JobSearch site, Jobsearch.gov.au.

Both sites provide data from a select day that is deemed to be “broadly representative of activity levels seen during the month”.

And what they’re saying, in contrast to the ABS vacancies report, is that demand for workers is slowing. It also fits with the Australian government’s internet vacancy series which is also pointing to a slowdown.

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