Australian jobs advertisements rose sharply in May, suggesting that labour market hiring may accelerate in the second half of the year.
According to the ANZ, the number of job postings increased by 2.4% to 157,942 in seasonally adjusted terms, leaving the increase on a year earlier at 9.1%.
The monthly increase was the largest in percentage terms since September 2015.
Internet-based postings jumped by 2.6% to 155,840, up 9.9% on the levels of May 2015.
Partially offsetting that increase, newspaper advertisements tumbled by 12.6% to just 2,102. They have now fallen by 31.1% over the past 12 months, underlining the shift in preference to online rather than print advertising from employers.
Felicity Emmett, head of Australian economics at ANZ, described the result as “encouraging”.
“After six months of broadly flat job ads, the strong rise in ads in May is encouraging. Despite some ongoing headwinds, the economy is tracking along quite well and the transition to non-mining activity is occurring,” she said.
“The rise in job ads is consistent with the strength in business conditions, which point to ongoing solid growth in the economy.
“Last week’s strong Q1 GDP report shows that the non-mining economy is gaining traction, with housing and the services sector key drivers of this strength.
“These sectors are also clearly helping to support jobs growth.”
Although Emmett believes the increase in advertisements is a good sign for labour market conditions in the second half of the year, the lack of inflationary pressures within the Australian economy at present, including wage inflation which has allowed employment growth to remain strong despite weaker levels of economic growth, still points to the likelihood that the RBA will reduce interest rates further.
“Despite the recovery in activity, wages growth remains low,” she said.
“Ongoing weak wage growth has helped to support solid employment gains over the past year or so and is likely to continue to do so.
“But very low growth in labour costs is feeding through to very low inflation. With inflation set to stay outside the RBA’s target band until at least mid-2017, we expect to see another cut in the cash rate in August to a low of 1.5%.”
The Australian Bureau of Statistics will release Australia’s official jobs report for May on June 16.
In April, Australian employment increased by 10,800, leaving the unemployment rate at 5.7%, the lowest level seen since September 2013.