Australia’s barnstorming run of jobs growth in 2017 may be set to cool, as job advertisements declined in December.
ANZ’s monthly job ads data showed a fall of 2.3% for December in seasonally adjusted terms, off-setting a 1.5% rise in November:
“The labour market in 2017 was characterised by widespread job growth (particularly in full time jobs), an increase in participation and a fall in the unemployment rate to a four-year low of 5.4%,” said David Plank, ANZ’s Head of Australian Economics.
November employment data from the ABS was the latest in a long line of stellar jobs reports for the Australian economy.
The data smashed expectations with another 61,600 jobs added, around two thirds of which were full-time.
“Growth in ANZ Job Ads provided a leading signal of this strong performance. As such, the fall in job ads in December might be a source of concern.”
However, Plank added there was a historical pattern of increased volatility in job ads in December because of the holiday season.
“Having said this, the easing in the trend pace of job ads growth in the fourth quarter lends support to our view that we may see a slowing in employment growth over the coming months,” Plank said.
“We believe that, after 14 straight months of growth, employment has overshot the levels implied by job ads and as such a period of moderation in jobs growth is likely.”
Plank still expects the Australian economy to add more jobs this year, just at a slower rate than in 2017.
And he’s relatively optimistic that continued strength in the labour market will eventually lead to long-awaited gains in wage growth.
The November employment figures showed underemployment — a measure of those in work who would like more hours — fell slightly, a sign that the jobs markets may finally be showing signs of tightening.
Any pickup in wage growth would be a welcome relief for Australian consumers, with some economists expressing concern around the outlook for 2018 domestic consumption amid high household debt and rising energy costs.