Job advertisements were flat in May, as both consumer and business confidence remains soft. However, the Reserve Bank is unlikely to jump into cutting the cash rate below 2%.
According to ANZ
’s monthly job advertisement series, job ads were flat in May, following a rise of 2.5% in April, in seasonally adjusted terms.
In trend terms, job ads rose 0.4% over the month, making it the 19th consecutive month of positive growth. However, the rate of growth has been slowing since late last year.
“After posting solid growth in April, job advertisements remained flat at an elevated level in May. However, trend growth has now been slowing for the past five months,” ANZ chief economist, Warren Hogan said.
“This slightly weaker result is in line with relatively soft confidence across both the household and business sectors. Although consumer confidence in economic conditions has improved on the back of the Commonwealth Budget, it remains below long-term average levels, weighed down by elevated unemployment and a soft labour market.
“Businesses also remain cautious, with soft growth in consumer demand and spare capacity impacting on confidence, hiring intentions and investment plans.”
Despite the slowing rate of growth in job advertisements and ANZ’s expectation of below-trend economic growth through 2015, Hogan expects the Reserve Bank to keep the cash rate on hold for an extended period, as it waits to see to what extent the two previous rate cuts are able to stimulate activity.