Australia | Oct 13 2008
By Chris Shaw
One of the last indicators of Australian economic strength is finally beginning to turn as the labour market weakens. The ANZ Job Ads series fell again in September to make it the fifth successive month of decline in the series. Total job ads fell 1.4%, which is an improvement from the 4.9% decline recorded in August.
Newspaper ads actually rose by 0.7% but remain 24.9% lower than the figure for September 2007, while internet adds fell a total of 1.5% and are now just 0.3% higher than at this time last year. ANZ Bank head of Australian economics Warren Hogan notes in trend terms both newspaper and internet ads fell, and with hiring intentions continuing to soften, an increase in the unemployment rate can be expected in coming months.
Hogan expects unemployment to hit 5.75% in the second half of 2009, while TD Securities senior strategist Joshua Williamson is forecasting unemployment of 5.8% a year from now compared to a current rate of 4.3%. Westpac senior economist Anthony Thompson has relatively similar forecasts, seeing unemployment increasing to 5.2% in the June quarter next year and to 5.6% by the December quarter of 2009.
According to ANZ’s Hogan, the Reserve Bank of Australia (RBA) is likely to continue to gradually ease monetary policy as the economic data continues to show a weaker economy, his forecast calls for the cash rate to be a further 1.0% lower by the middle of next year.
Williamson sees the RBA as being more aggressive with respect to its easing bias, though he is yet to finalise his forecasts with respect to interest rates.