It looks like Australian job growth is going to slow

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The number of Australian job advertisements increased modestly last month, fitting with recent evidence that labour market conditions are cooling.

According to the ANZ’s job ads survey, the number of postings increased by 0.2% to 155,108 in March, leaving advertisements up 10.0% from 12 months earlier.

Job ads posted on the internet rose by 0.4% to 152,543, helping to offset a dramatic 11.4% plunge in newspaper advertisements that fell to just 2,565.

Reflective of the trend towards digital advertising, internet job advertisements rose by 10.7% from March 2015, a complete divergence from newspaper advertisements which slumped 19.5%.

To Justin Fabo, senior economist at the ANZ, the sharp deceleration seen over the past four months points to the likelihood of slower job growth in the period ahead.

“The number of job ads has been broadly unchanged for four months now, signalling an easing in hiring intentions. To some extent this is unsurprising given the strong pace of jobs growth over much of 2015 and modest improvement in the unemployment rate,” said Fabo.

“As we flagged last month, the recent run of softer job ads could partly reflect some caution on behalf of businesses amid heightened financial markets volatility and uncertainty about the global economic outlook.

“Domestic political developments over the past month and uncertainty about the timing of the Federal election are also unlikely to have been positive for labour demand.”

Though the ANZ survey points to slowing demand for labour, Fabo doesn’t believe that it will slow to levels that will place substantial upward pressure on the unemployment rate.

“In our view, ANZ job ads are providing a ‘cleaner’ picture of labour market conditions,” says Fabo. “Hiring is taking a breather but we expect jobs growth to maintain enough momentum over the coming six months to keep the unemployment rate within earshot of 5.75%.”

Australia’s official March jobs report will be released by the ABS on April 14.

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