- Australian employment growth is averaging 12,400 per month, well below the 34,300 level seen in 2017.
- The Department of Jobs and Small Business Internet Vacancy Index fell 0.9% in May, the third monthly decline in a row.
- Suggests the RBA might be wrong about “forward-looking indicators of labour demand … point to employment growth”.
Australian employment growth has slowed sharply this year, averaging 12,400 per month in seasonally adjusted terms, well below the 34,300 level seen in 2017.
The moderation in hiring can seen in the chart below, showing employment growth in trend terms.
It looks like that slowdown could be about to get even sharper.
According to Australia’s Department of Jobs and Small Business Internet Vacancy Index (IVI), job openings advertised on the internet fell 0.9% last month in trend terms, adding to the 0.8% decline seen in February.
The index has now fallen for three consecutive months, the longest stretch of declines since mid-2016.
Before March this year, vacancies had increased for 16 straight months, coinciding with the record employment growth seen last year.
Now vacancies are falling, hinting that employment growth may do the same.
It’s only small, but it can be clearly seen in the chart below.
From a year earlier, the index is still up 5.8%. However, that’s nearly half the level it was growing at earlier this year.
In the minutes of its June monetary policy meeting, the Reserve Bank of Australia (RBA) board said that “employment growth had slowed from a very fast pace in 2017 to something closer to the rate of growth in the working-age population”.
However, it countered that by suggesting “forward-looking indicators of labour demand had continued to point to employment growth increasing to above-average rates in coming months”.
The IVI, in isolation, suggests the exact opposite outcome is likely.
Adding to the slightly unnerving report, advertisements decreased in all eight occupational groups over the month, led by weakening demand for sales workers and labourers where openings fell 1.5% apiece.
Vacancies also declined in four of Australia’s eight states and territories, including New South Wales, Victoria and Queensland, the most populous states.
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 advertisements in the labour market 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.
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