Job Ads: Mixed Bag

KEY POINTS:

• On a seasonally adjusted basis, ANZ Australian Job Advertisements bounced 1.5% in July, nearly reversing the 1.7% fall recorded last month. On an annual basis, growth ticked up to 7.3% in July (vs 6.9% in June).
• In trend terms, job ads eased 0.2% m/m in July, the first monthly fall in nearly four years. There has been a clear slowdown in m/m trend growth since February this year.

ANZ’S HEAD OF AUSTRALIAN ECONOMICS, DAVID PLANK, COMMENTED:

“Encouragingly the weakness in ANZ Job Ads in June did not continue into July. But reflecting the plateau in the level of job ads since the start of the year the monthly trend has softened considerably. In trend terms average monthly growth slowed from 0.8% in Q1 to 0.2% in Q2. Growth in July was -0.2%, the first fall since September 2014.

That said, other labour market indicators offer a contrasting picture. Business conditions, while down from record levels, remain well above long term averages. Capacity utilization and profitability also remain at high levels. As such we expect employment growth to continue at a pace consistent with a gradual decrease in the unemployment rate.

We will be closely watching the Job ads, however, as further weakness in the series may challenge our view. This in turn would have implications for wage growth, consumption and the return of inflation to the target band.”

Please see attached document for further details.