The number of job advertisements in Australia rose strongly in June, providing more evidence that the Australian labour market is in good shape.
Job advertisements rose by 2.7% in June after climbing by 0.4% in the previous month. The increased number of June listings takes annual growth in jobs ads up to 10.5% from 7.2%.
The rise in job advertisements is consistent with recent employment data released by the ABS, as Australia’s jobs report again smashed expectations in May.
The fall in the unemployment rate has been one of the few bright spots in domestic data, as the combination of low wage growth and high household debt threatens GDP growth.
In explaining the latest figures, ANZ said that recent employment gains have been due in part to the labour market catching up to leading indicators such as the bank’s job advertisements index.
“According to the official labour force data, some 140,000 jobs have been created over the three months to May – with the unemployment rate dropping to 5.5%,” said ANZ’s team, led by chief economist David Plank.
“We think there is a strong element of catch-up in these data, with employment outcomes prior to these three months looking far too weak given indicators such as the ANZ Job Ads survey.”
The bank said that the gap between actual employment and key indicators had now closed.
Given that the number of job advertisements has increased annually by 10%, ANZ expects that further increases in employment can still be expected.
However, the number of new jobs is more likely to trend around 15-20,000 per month rather than the large gains seen in the most recent quarter.
ANZ’s team said that employment growth this year is partly reflective of the improvement in business conditions and the underlying profitability of Australian companies.
It said that improved labour market conditions would help boost consumer sentiment as Australian policy makers try to fend off the risks from dwindling domestic consumption.
Furthermore, strong employment will help the Reserve Bank of Australia hold its ground on interest rates amid mounting concerns about Australia’s economic growth.
“The ongoing strength of the labour market allows the RBA to effectively disregard the weakness of GDP growth in the first half of this year when it reviews its forecasts for the August Statement of Monetary Policy,” Plank said.