Australian job advertisements continued to climb in April, which could bode well for the 2017 employment outlook.
ANZ’s monthly data release showed a seasonally-adjusted 1.4% increase in job advertisements, trending up from a modest 0.8% rise in March.
That takes the annual growth in job ads to 10.1%, up from 7.1% a month ago. This chart shows the steady rise in job ads since 2014:
Given that the job ads report is seen as a leading indicator of employment strength, the consistent monthly growth shows that further strength in employment figures is on the way.
ANZ head of Australian Economics David Plank echoed those sentiments, highlighting the disconnect between the recent rise in unemployment and strengthening business conditions.
“After tracking around 5.75% for most of 2016, unemployment has recently moved higher. Meanwhile, business conditions and confidence remain well above the long run average, and capacity utilisation now sits at its highest level since 2010,” Plank said.
While March’s employment numbers were unexpectedly strong, Plank said there was still a gap between official employment figures and survey-based methods such as the job ads report.
“In our view, employment is likely to show further strength over the coming months to close this gap,” Plank said.
This chart shows how employment growth has recently trended upwards to more closely track the movements in ANZ’s job ad data:
Plank repeated his assertion from the March report that although the bank predicts employment will pick up, wage growth is still likely to be gradual.
“Given the spare capacity in the labour market, however, any improvement in wage growth is likely to be gradual, suggesting that labour cost pressures will continue to remain subdued for some time,” Plank said.