Job Ads Improving in Australia

The total number of jobs advertised in major newspapers and on the internet grew by 4.1% in August to a weekly average of 130,326 per week, according to the ANZ Job Advertisements Series. This was the first monthly rise since April 2008 and follows a fall of 1.7% in July. Even with this increase however, the total number of job ads in August was still 48.1% lower than 12 months earlier.

Newspaper job advertisements
The number of job ads in major newspapers increased by 5.5% in August to an average of 8,613 per week. This follows a 0.4% fall in July. Newspaper ads are now 43.1% lower than in August 2008.

Most states experienced increases in newspaper job ads in August with Victoria (-15.2%) the only state to experience a fall. New South Wales (+24.1%) experienced the largest rise in percentage terms, followed by Western Australia (+10.2%), South Australia (+9.3%), the Northern Territory (+9.2%), the ACT (+7.8%), Tasmania (+4.3%) and Queensland (+1.2%).

Internet job advertisements
The number of internet job ads grew 4% to average 121,713 per week, and were 48.4% lower than 12 months earlier.

ANZ acting Chief Economist Warren Hogan, said:
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ANZ job advertisements grew by 4.1% in August, providing the first example of monthly growth since April 2008 and the strongest rate of monthly growth since December 2007.
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Even after this growth spurt however, total job ads remain at extremely low levels and are still 48.1% lower than at the same time last year.
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These data provide the best evidence we have received to date that the labour market (and the economy more generally) are about to enter the recovery phase of this downturn.
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So far in this downturn, the Australian labour market has been affected by cuts to hours instead of to employment, resulting in underemployment rather than unemployment (that is, employers have cut back on staff working hours rather than reducing their overall headcount). Indeed, the main driver of increasing unemployment has been rapid growth in the labour force due to strong population growth and high levels of participation. Once the recovery commences, this process is likely to happen in reverse, with work hours for existing employees creeping up again first, before total employment numbers begin to grow. It may therefore take some time to see sustained net job growth.
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In the near term, we expect to see some continued deterioration in the labour market, due to the very low level of demand for new labour, some residual job shedding and continuing strong growth in labour supply. Despite today’s improvement in the ANZ job ads series, we still expect employment to fall by around 15,000 in August and the unemployment rate to rise to 6%, when the ABS releases its labour force numbers for August this Thursday.
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Looking further ahead, today’s numbers confirm our optimism that the pace of decline in employment will not be as severe as envisaged six months ago. Australian economic activity has been remarkably resilient in recent months, particularly in some of our largest employing industries such as retail trade, health services, government and construction.
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Furthermore, the rebound in business investment (up 2% in Q2) and good growth rates across most domestic industries in last week’s national accounts indicate that some of the main sources of downward pressure on labour demand are now easing. In particular, Australian manufacturing, which saw job cuts of 76,500 in the year to May 2009, experienced growth in real output in Q2 (+0.7%) for the first time since last June.
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We now expect the Australian unemployment rate to peak at around 7.25% in mid 2010.