The latest jobs outlook presents a significant headwind to the overall economy, ahead of the Reserve Bank’s monetary policy meeting today.
The latest jobs advertisement series released by ANZ
shows that job advertisements rose 1.3% over June, in seasonally adjusted terms. In trend terms, job ads posted its twentieth consecutive monthly rise. However, ANZ
chief economist, Warren Hogan says growth has slowed since late last year and it is unlikely jobs growth will remain as strong as it has been this year.
“Job ads have been trending higher for nearly two years now and the unemployment rate has been broadly unchanged since mid last year amid better jobs growth,” he said.
“Looking ahead, it is difficult to see jobs growth remaining as strong as it has been this year amid below-trend growth in economic activity… We expect to see the first signs of softer labour market conditions in this week’s official employment figures. But it could take some time to get clarity on the direction of the labour market.”
As a result, Hogan says this presents a significant headwind to the overall Australian economy, which means the Reserve Bank is likely to maintain an easing bias when it meets today to set the agenda on monetary policy.
“Ultimately, however, subdued household income and spending growth will remain a significant headwind to overall economic activity and hiring. We expect the RBA
to keep the cash rate at its very accommodative setting for some time but to maintain a mild easing bias.”