Falling job ads foreshadow unemployment spike

by Adam Smith08 Nov 2011

Job ads have fallen for the fourth consecutive month as unemployment looks set to rise.

The ANZ Job Ads series has indicated job advertisements decreased 0.7% for October, representing the sixth fall in seven months. In spite of the decline, ANZ head of Australian economics and property research Ivan Colhoun said the drop-off in job ads has been gradual.

"The decline in job advertising to date is very moderate, more like the slowing in 1996-97 than the collapse in advertising witnessed during the GFC in 2008-09," Colhoun commented.

In light of the figures, however, ANZ has forecast the unemployment rate to continue to rise, hitting 5.5% by mid-2012. The bank predicted that jobless numbers would plateau by the middle of next year, with the expected boom in mining investment propping up employment.

Along with its unemployment forecasts, ANZ has predicted a further 25bp cut by the RBA.

"ANZ believes there is continued scope to ease interest rates towards a 'neutral' stance from the 'more neutral' stance at present," Colhoun said.

The bank predicted the next RBA rate cut to take place in February.

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