If I told you that job ads in Australia had risen for nine months in a row and trended higher for 16 consecutive months you’d probably think the economy was in the pink of health.
But Australia, with a 6.4% unemployment rate, is in the midst of a perplexing economic situation where employment is growing but not at a pace fast enough to keep up with the economy.
Explaining this, ANZ Chief Economist Warren Hogan wrote in a note accompanying the release of the data.
Job advertisements remain on a moderate upward trend, suggesting that labour demand is holding up across certain sectors of the Australian economy.
That said, while job ads did experience their ninth consecutive monthly increase, the annual pace of growth has eased somewhat in the previous two months, suggesting some loss of momentum.
In addition, growth in new labour demand appears to be occurring in tandem with job losses in certain sectors such as manufacturing and mining. As such, aggregate employment outcomes continue to fall short of population growth, with the unemployment rate edging up.
We expect this process to continue through much of this year, in line with sub-trend economic growth outcomes.
Employment is growing. Just not enough to keep unemployment down and fix the glass half empty nature of consumer sentiment.
This, Hogan says, means there is some “possibility that a third cut (from the RBA) will become appropriate later in the year, should confidence and indicators of non-mining investment and household consumption fail to turn up sufficiently.”