There has been some further good news on Australia’s labour market.
The ANZ’s monthly job ads survey, a lead indicator on likely hiring trends in the months ahead, rose strongly in June.
Total advertisements increased by 1.3% to 146,935 in seasonally-adjusted terms, leaving the annual growth in job ads at 10.8%. Internet job postings rose by 1.4% to 143,960, an increase of 11.8% from June 2014, helping to offset a 1.3% decline in newspaper advertisements which fell to 2,975.
As the chart above shows, while jobs ads have been trending higher, the increase is coming off a low base by historical standards.
Despite the impressive monthly result, ANZ chief economist Warren Hogan believes the acceleration in job ads seen over the past 12 months will be hard to sustain in the period ahead.
“Job ads have been trending higher for nearly two years now and the unemployment rate has been broadly unchanged since mid last year amid better jobs growth. A significant share of the pick-up in employment growth has been in a range of labour-intensive services industries, in part supported by better trading conditions and low wages growth. Downward pressure remains on employment in mining, mining-related construction and manufacturing.
Looking ahead, it is difficult to see jobs growth remaining as strong as it has been this year amid below-trend growth in economic activity. Significant job losses are still forthcoming as several large resource projects are completed. We expect to see the first signs of softer labour market conditions in this week’s official employment figures.
But it could take some time to get clarity on the direction of the labour market. Ultimately, however, subdued household income and spending growth will remain a significant headwind to overall economic activity and hiring. We expect the RBA to keep the cash rate at its very accommodative setting for some time but to maintain a mild easing bias”.
In other words, despite the growth in job advertisements seen over the past 12 months, thanks in part to record-low wage growth and hiring in lower-paying industries, the winding down of the mining capital expenditure boom, along with subdued household incomes growth and as a consequence subdued levels of consumption, will act as a headwind to hiring intentions in the year ahead.
Australian employment data for June will be released on Thursday. Economists expect flat growth in employment for the month.