- ANZ’s Job Ads index rebounded in July, although growth rates continued to decline in trend terms.
- Economist David Plank said conditions in Australia’s labour market remain favourable, but any weakness in job ads data will cause the bank to reassess its view.
- The slowdown in job ads growth this year matches declining rates of monthly jobs growth in Australia’s labour market.
Growth in Australian job advertisements steadied in July after a sharp fall in June, according to monthly data compiled by ANZ.
New jobs ads rose by 1.5% in seasonally adjusted terms to 178,322, partially offsetting the previous month’s 1.7% decline.
However, economists at the bank described the latest results as a “mixed bag”, given trend data is still indicative of a jobs market slowdown.
“Encouragingly the weakness in ANZ Job Ads in June did not continue into July. But reflecting the plateau in the level of job ads since the start of the year, the monthly trend has softened considerably,” said David Plank, ANZ’s Head of Australian Economics.
Plank noted that in trend terms, average monthly growth in job ads slowed from 0.8% in Q1 to 0.2% in the three months to June.
And for the month of July, trend growth actually turned negative (-0.2%) for the first time since September 2014.
But Plank said there were other factors offsetting the negative trend in job ads. For one thing, domestic business conditions remain elevated.
And the sub-indexes within NAB’s business survey show strong readings for profitability and capacity utilisation. In addition, the most recent quarterly data from the ABS showed job vacancies rose to a record high.
It all adds up to a relatively intriguing outlook for Australia’s labour market in the second half of the year.
So far, the downward trend in ANZ’s job ads data has been matched by a slowdown in employment growth, after a booming 2017.
Data from the ABS showed employment growth rocketed higher in June, smashing expectations with a monthly gain of 50,900 in seasonally adjusted terms.
However, analysts from Macquarie highlighted some odd-looking features in the latest data set, and many analysts have expressed concern for some time about the reliability of seasonally adjusted jobs figures.
For now, Plank and the team at ANZ expect the economy will continue adding jobs in the months ahead, “at a pace consistent with a gradual decrease in the unemployment rate”.
“We will be closely watching the job ads, however, as further weakness in the series may challenge our view.”
“This in turn would have implications for wage growth, consumption and the return of inflation to the target band.”
ANZ compiles its monthly job ads data based on information from two employment websites — seek.com.au and the Australian government’s jobsearch.gov.au.
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