Job advertisements have risen for the fifth consecutive month, suggesting a turnaround in the Australian labour market.
The latest employment figures released by the Australian Bureau of Statistics saw the unemployment rate increase 0.1 percentage points to 6.1% in September. However, the ANZ
Job Advertising Series show that job advertisements increased 0.2% over October. Job ads have now trended higher for 12 months and are up 7.5% over this period.
Chief Economist Warren Hogan said the modest improvement over October is an encouraging sign that the pickup in labour demand is continuing.
“In our view, this should feed into better employment growth outcomes and see the unemployment rate stabilise. Past relationships suggest this level of job advertising is consistent with employment growing at an annualised pace of just under 2%, more than the current pace of population growth.”
Looking at the wider economy, Hogan says there are some more encouraging signs, although he predicts the Reserve Bank won’t start to tighten the cash rate just yet.
“More broadly, the outlook for the economy is improving. The transition to non-mining drivers of growth appears to be occurring, if only gradually. Measured business capex intentions have strengthened, and in the context of significant depreciation of the non-mining capital stock and relatively healthy business balance sheets, suggest the building blocks of a more convincing investment upswing are in place.
“The recent depreciation in the AUD should also support this transition towards non-mining drivers of growth – and help to rebalance economic activity. However, in our view, the combination of higher house prices but relatively soft growth outlook will keep the RBA
on hold for the time being, before beginning to increase rates gradually from the middle of next year.”