Australian jobs ads flat-line but that doesn't mean employment growth will follow suit

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  • Australian jobs ads were unchanged in December, according to ANZ Bank’s latest survey.
  • Without a big lift in ads in January, annual growth looks set to turn negative for the first time since mid-2014.
  • ANZ cautions the downtrend in ads may not lead to a similar slowdown in employment growth. The RBA agrees.

Australian job advertisements flat-lined in December, according to data from ANZ Bank.

After seasonal adjustments, the number of advertisements were unchanged at 175,428. Despite the soft monthly result, advertisements actually rose 4.1% from a year earlier — faster than 2.1% pace reported in November — thanks to a lower base effect.

In trend terms, ANZ said total advertisements fell by 0.1% over the month, trimming the increase over the past year to 1.5%.

Job ads have now fallen for seven consecutive months in the trend series, mirroring similar results reported by the government’s Internet Vacancy Index over the same period.

The trend series aims to smooth out volatility in the seasonally adjusted data.

ANZ Bank

“From double digit growth in 2017, the annual growth of job ads progressively slipped through the year,” said David Plank, Head of Australian Economics at ANZ Bank.

“Unless job ads jump by 1.3% or more in January, the annual rate of change in job ads will slip into negative territory for the first time since March-April 2014.

“This need not point to a drop in employment, however. The level of job ads is sufficiently high for ongoing employment growth even if they remain flat.”

However, while past relationships point to a slowdown in employment growth in the months ahead, Plank says that may not play out in reality.

“Job ads have been underestimating employment growth and overestimating unemployment for some time,” he said, pointing to the two charts below.

“If we combine it with other indicators things look more positive, with ANZ’s Labour Market Indicator still pointing to a lower unemployment rate. We would be more confident in this outlook if job ads ended its downtrend.”

ANZ Bank
ANZ Bank

In a speech last year, RBA Deputy Governor Guy Debelle suggested signals from job advertisements on the outlook for hiring my not be as reliable as was previously the case, noting job candidates and employers may now be interacting on other platforms, rather than traditional jobs websites.

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