In what is an encouraging sign for Australia’s labour market in the months ahead, the number of new job ads rose strongly in November, increasing 1.3% to 156,187 according to the ANZ.
Demonstrating the improvement in series over the past year, the increase in November left advertisements up 12.3% from the levels of November 2014.
Job advertisements posted on the internet rose by 1.4% to 153,274, leaving the annual increase at 13.0%. That helped to offset weakness in newspaper advertisements – a far smaller component compared to online ads – which fell 4.3% to 2,913. From a year earlier they declined by 14.0%.
According to Felicity Emmett, ANZ co-head of Australian economics, the gain in advertisements continues to send positive signals about the current state of the economy.
Overall activity is clearly being supported by labour intensive services industries. This was borne out in last week’s national accounts which showed ongoing subdued activity in a range of goods industries but strong growth across a range of services industries. This has been reflected in hiring and jobs growth. There is also evidence that fiscal restraint by governments has eased overall and public sector hiring has picked up. Overall employment growth has also been supported by relatively weak wages growth.
We expect the unemployment rate to broadly track sideways around 6% until later next year which would be an unsatisfactory outcome in our view. We see jobs growth slowing in 2016 as the boost from strong property market activity and the lower currency begins to wane. There is a risk, however, that job ads are signalling that employment growth could remain relatively strong for some time yet and the unemployment rate could decline a little.
While the ANZ see the unemployment rate tracking sideways in the year ahead, as a reliable lead indicator to future developments in Australia’s labour market the continued uplift in job advertisements suggests the strength in October’s jobs report may part of a broader trend rather than an anomaly.
According to the ABS, nearly 60,000 additional jobs were created in October, seeing the unemployment rate tumble to 5.9%.
On Thursday the ABS will release its November jobs report with expectations considerably lower than the strength witnessed in October. According to a survey conducted by Bloomberg, the median economist forecast is for the economy to shed 10,000 jobs in November, leaving the unemployment rate slightly higher at 6.0%.