There’s some mixed news on the outlook for employment growth in the months ahead.
On one hand, job vacancies rose to the highest level on record in the three months to November last year, according to the Australian Bureau of Statistics (ABS).
However, on the other, the increase was slower than the period between May to August which, along with the decline in ANZ’s Job Ads series in December, suggests the pace of employment growth may slow in the months ahead.
In trend terms, the ABS said vacancies rose by 4.1% to 210,800 in the latest report, below the 4.4% increase recorded in the three months to August.
However, reflecting just how much improvement has been seen in the labour market over the past year, total vacancies were still up 16.8% on the levels of a year earlier.
Better reflecting the slowdown over the quarter, the ABS said vacancies in seasonally adjusted terms grew by a smaller 2.7%, below the 6.7% level of three months earlier.
By sector, the ABS said vacancies in the private sector grew by 4.6% to 191,800, an increase of 17.7% from 12 months earlier. In comparison, public sector vacancies fell by 0.7% to 19,000, leaving the gain over the past year at 8,100.
While certainly strong numbers, Sarah Hunter, BIS Oxford Economics’ Head of Economics Australia, said the report may be the first signs that employment growth will moderate in the coming months after a spectacular 2017.
“A slowdown in employment is somewhat inevitable, given the underlying long run growth rate of the working age population and labour supply,” she said following the release of the ABS report.
“But jobs growth has also raced well ahead of output growth, and with domestic demand forecast to remain subdued this year [due to] moderate growth in consumer spending and an expected downturn in residential construction activity, we expect firms to slow the pace of hiring as we move through 2018.”
Even if a slowdown in employment growth is on the horizon, it will need to be put into perspective.
According to the ABS, full-time employment increased by 304,600 in the 12 months to November, far outpacing a 78,700 increase in part-time employment over the same period.
Combined, total employment increased by a mammoth 383,300 from 12 months earlier. To put that figure into perspective, it was second-fastest annual increase on record, only surpassed by the 409,200 increase recorded in the year to August 2005.
So if employment growth does slow, it will be from a near-record breaking pace.
Australia’s December jobs report will be released on Thursday, January 18.