If there's a shining light in the Australian economy right now, it's the jobs market

Phil Walter/Getty Images
  • Australia’s jobs market remains a bright spot for the economy. Some may even say it’s the only bright spot.
  • Online job vacancies hit the highest level in nearly seven years last month, suggesting that hiring will remain firm in the months ahead.
  • Australia’s January jobs report will be released on Thursday. It’s expected to be pretty good.

If there’s a shining light in the Australian economy right now, it has to be the jobs market.

In comparison to other recent data, some may even describe it as the only shining light for the economy.

Even the RBA — well known for taking a glass-half-full view on things — acknowledged just how resilient recent jobs data has been in comparison to other indicators.

“Members noted the continued improvement in conditions in the labour market and that the labour market data had been stronger than other data on economic activity,” it said at its February monetary policy meeting.

“Employment had continued to grow faster than the working-age population in the December quarter, with most of this growth in full-time employment.

“The unemployment rate had declined to 5% which was the lowest rate since 2011.”

Even with the deterioration in other economic data, it also remained positive towards the outlook for hiring in the months ahead.

“Forward-looking indicators had been consistent with above-average employment growth over the first half of 2019,” it said.

Based on the latest Internet Vacancy Index (IVI) released by the Australian government, recent labour market trends, and the RBA’s optimism towards the outlook for the jobs market, are likely to be maintained for some time yet.

In January, openings rose to the highest level in nearly seven years.

Department of Jobs and Small Business

“The IVI increased by 1.3%, reaching its highest level since March 2012,” the government’s Department of Jobs and Small Business said.

“It stands 3.3% above the level recorded a year ago and 30.7% higher than the level recorded five years ago.”

The IVI is based on a count of online job advertisements newly lodged on SEEK, CareerOne and Australian JobSearch during a particular month.

The government says it does not reflect the total number of job openings in Australia as it does not include jobs advertised through other online job boards, employer websites, word of mouth, in newspapers, and advertisements in shop windows.

It also does not specify whether vacancies are for full-time, part-time or casual workers.

As seen in the table below, vacancies rose in all states and territories last month, ranging from an increase of 0.7% in Queensland to as high as 2% in Tasmania.

Department of Jobs and Small Business

In New South Wales and Victoria — where over 40% of Australians live — openings rose by an impressive 1.8% and 1.3% respectively from a month earlier.

Similar trends were also evident across all occupation sectors with vacancies increasing 0.2% for sales workers to as high as 1.6% for professional and administrative staff.

Department of Jobs and Small Business

At face value, the IVI for January points to a broad improvement in labour market conditions in early 2019, signalling that unemployment may continue to fall in the coming months.

All that’s left now is to put that theory to the test.

Markets will get the opportunity to do just that on Thursday when the ABS releases Australia’s January labour force report.

Employment is tipped to increase by 15,000 over the month, leaving the unemployment rate steady at 5%.

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