Declining job advertisements signals the need for further monetary policy easing, says ANZ
’s chief economist.
According to ANZ’s Job Advertisement Series, job advertisements fell 1.4% in March for the first time after nine months of rises. Despite declining slightly in March, job advertisements still remain elevated. However, this follows two months of slowing growth at the start of 2015.
ANZ’s chief economist, Warren Hogan says this may suggest that peak growth in job advertisements has now passed and further rate cuts are necessary.
“The expectation of rising unemployment continues to suggest that further monetary policy easing will be required. Data released since the RBA
last cut interest rates in February tend to support the decision to provide monetary stimulus. Unemployment is stuck above 6%, retail expenditure remains modest, business confidence has slipped to the lowest level in nearly two years, and businesses are indicating that they plan to reduce capital expenditure next year,” Hogan said.
Last month, the Reserve Bank admitted that rate cuts may not be having as much of an impact as they have in previous periods, however Hogan says monetary policy has not been exhausted.
“[W]e believe the lower interest rate environment will assist the recovery in non-mining business investment and household consumption as well as keeping some downward pressure on the currency.”