Key job market indicators will become ‘critical’ as Australian house prices continue to fall

(Phil Walter / Getty Images)
  • ANZ’s monthly job ads data is tracking sideways, after stronger growth at the start of the year.
  • That suggests a slower decline in the Australia’s unemployment rate, although economist David Plank still expects it to fall over time.
  • Plank said a strong labour market will be “critical” if the Australian economy is to withstand falling house prices.

ANZ’s job ads index fell for the second straight month in September.

Data showed Australian job advertisements fell by 0.8% in seasonally adjusted terms, following a 0.7% fall in August.

The monthly result saw annual growth slow to 4.7% (from 5.1%), reflecting a broader sideways move after some stronger gains at the start of the year.

Source: ANZ

In its latest set of economic forecasts, the RBA predicted a gradual decline in Australia’s unemployment rate to 5% by 2020.

And comments from ANZ economist David Plank suggests the latest job ads data appears consistent with that view.

“The level of job ads is still consistent with ongoing employment growth, but at a level that stabilises the unemployment rate rather than pushes it lower,” Plank said.

However, Plank noted other recent indicators are cause for optimism on the jobs front.

The number of job vacancies that need filling just rose to the highest level on record, while jobs growth in August doubled expectations.

“This suggests to us that the unemployment rate will most likely head lower over time.”

And in an environment of falling house prices, Plank said a strong labour market will be “critical” to keep the broader economy on track.

“A marked decline in ANZ job ads would be a negative signal in this regard. So far that has been avoided,” Plank said.

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