The number of Australian job ads fell modestly in December, indicating that the breakneck hiring spree seen in the second half of 2015 may slow in the early parts of 2016.
According to the monthly ANZ job advertisement series, job postings fell by 0.1% to 155,704 in December in seasonally adjusted terms. Despite the monthly decline, advertisements increased 10% from a year earlier, fitting with recent strength seen in the labour market.
Newspaper advertisements – making up just 2% of all job postings – slid 1.2% to 2,877, leaving the annual decline at 13.8%. Online advertisements fell by 0.1%, leaving the annual increase at 10.6%.
While the modest decline in December suggests that the improvement in the labour market is slowing, ANZ chief economist Warren Hogan believes that the timing of Christmas may have contributed to the small, and somewhat unexpected fall.
The underlying trend in job advertising remained encouraging at the end of 2015. While job ads were broadly unchanged in December, this appears to have been weighed down by the timing of Christmas Day. Internet job ads are recorded as a snapshot each Friday, one of which was Christmas Day this year. As a result, this is likely to have somewhat depressed measured job ads for the month.
As a result of this statistical quirk, Hogan believes that Australia’s unemployment rate is likely to hover around 6%, or decline, in the near-term. However, beyond the months ahead, he suggests the biggest risks to Australia’s economy, and as a consequence the labour market, stem from China.
The solid trend in job advertising bodes well for the near-term employment outlook. Jobs growth has been strong over the past year and the unemployment rate has fallen a little below 6% from a peak of 6.4%. The positive job ads trend suggests that the jobless rate should remain below 6% in coming months and could even improve a little further.
For the Australian economy the major risks still appear to be external, as is often the case. Only time will tell whether recent ructions in China are indicative of broader challenges in that economy and whether the reverberations across global financial markets are lasting. But it certainly remains the case that achieving growth is much more difficult in the post financial crisis world.
The ANZ series come just 4 days before the release of the ABS’ official employment stats for December.
After two months of stellar job creation in October and November, economists are forecasting some statistical “payback” in December.
According to a survey of 23 economists conducted by Bloomberg, the median forecast is for employment to decline by 10,000, leaving the unemployment rate at 5.9%.
ANZ has one of the more bullish forecasts of those published, predicting no change in employment over the month.