Job ads foreshadow higher unemployment, lower rates

by Adam Smith05 Jun 2012

Weakening job ads have pointed to rising unemployment in the months ahead, but may spur lower interest rates.

The ANZ Job Ads series fell 2.4% in May, following on a 0.8% decline for April. Newspaper job advertising led the declines, with a 17.3% year-on-year decline, while online ads fell by 3.6%.

New unemployment figures are due on Thursday, and While the unemployment rate fell in April, ANZ head of Australian economics and property research Ivan Colhoun said the figure is not providing an accurate view of the labour market.

"Full-time employment growth is minimal, measures of underemployment are rising, the employment to population ratio is declining and the numbers of Australians receiving unemployment assistance are increasing," Colhoun said.

In light of the figures, Colhoun has predicted that the RBA will make a 25bp cut to the cash rate when it meets today. He forecast a further 50bps of cuts before year's end.