Job advertisements rose by an “encouraging” 2.4% in May as businesses regain confidence, but the good news won’t be enough for the Reserve Bank of Australia.
The jump in ANZ
’s monthly job advertisement tracker follows a small fall in April and a broadly flat trend since October last year.
head of Australian economics, Felicity Emmett, said the growth is encouraging and indicates our economy is transitioning well to non-mining activity.
“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,” she said.
However, Emmett warns that the boost in business confidence will not make up for disappointing inflation figures.
“Despite the recovery in activity, wages growth remains low. 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.”
As a result, Emmett says the major bank expects to see another cut in the cash rate in August to a low of 1.5%.