Job advertisements recorded a solid rebound in April ahead of the Reserve Bank’s board meeting today, where it now sits at the highest level in two and a half years.
According to ANZ
’s Job Advertisement Series, job advertisements increased 2.3% in April, after falling for the first time in ten months in March. Whilst this is positive news for the labour market, ANZ chief economist Warren Hogan says the unemployment rate is still “stubbornly” high.
“The release of the March labour force survey contained revisions which increased employment and lowered the unemployment rate, painting a better overall picture of the labour market. But despite this improvement, the unemployment rate is remaining stubbornly higher than the trend increase in job ads would suggest,” he said.
“As described in last week’s Australian Economic Insight, [ANZ] believe this divergence is partly due to a high level of job losses in particular sectors, which suggests that job ads may be a more appropriate indicator of labour demand in the non-mining, non-manufacturing sectors at present. Retrenchments and strong growth in part-time labour supply may also be driving a reduction in the ability of the labour market to match jobs with workers.”
As a result, Hogan says he still believes that a further rate cut may be necessary in May, despite the rebound in job ads.
“We continue to expect further monetary policy easing given soft business and consumer confidence, a negative outlook for non-mining investment, and likely further job losses across mining and manufacturing,” he said.
“However, a more positive starting point for the labour market, a re-acceleration in investor housing credit and RBA
comments that monetary policy is less effective than it has been in previous episodes, cause us to acknowledge that a cut in May might be a line-ball call.”