Australia | May 10 2010
By Greg Peel
Following three positive months of growth in employment classifieds, including a 1.8% increase in March, the ANZ Bank survey of job ads showed a 1.2% fall in April to 160,660 per week, seasonally adjusted.
Newspaper ads were down by 0.7% and internet ads by 1.3% but in trend terms total ads grew by 2.6% month-on-month and 14.9% year-on-year. That's the fastest annual growth rate since April 2008. Ad numbers are now 28.3% above the cyclical trough in July 2009 but remain 42.3% below the all-time peak of April 2008.
ANZ Chief Economist Warren Hogan is not surprised by this month's figures given two successive RBA rate hikes. Furthermore, labour demand exhibited very strong growth in the honeymoon of late 2009 and into early 2010 so a bit of a slowdown is to be expected.
“Although there has been some slowing in the monthly growth figures in recent months,” notes Hogan, “trend growth in job advertisements is above its long-term average, suggesting that demand for labour remains relatively healthy”.
Hogan suggests momentum in job vacancies points to further employment growth in Australia in 2010, consistent with the broad outlook for Australia's economy. ANZ expects a modest up-tick in jobs in April (data to be released this Thursday), but with a low participation rate Hogan sees the actual unemployment rate remaining steady at 5.3% for the fourth successive month. He nevertheless forecasts a rate of 5.0% by year-end.
ANZ is expecting the RBA to remain on hold in coming months to assess the ongoing situation, although the strength suggested by the RBA's quarterly monetary policy statement (released last Friday), including upgrades to GDP and inflation growth numbers, means the central bank has “little room for error”.
ANZ is forecasting an RBA cash rate of 5.25% by year-end.