The Australian jobs market is showing further signs of weakness, with job advertisements in newspapers and on the internet slipping for a third consecutive month in September. ANZ’s monthly survey shows job ads dipped 2.1 percent in September, from August. Job ads have fallen five times in the past six months and are up just 3.1 per cent on a year ago.
ANZ Head of Australian Economics and Property Research, Ivan Colhoun said “moderating job advertising points towards a further softening in employment growth in the months ahead and a modest rise in the unemployment rate.”
ANZ expects the Australian unemployment rate to rise to 5.5 percent by mid-next year. However, the lender doesn’t expect the slowdown in jobs growth to be as bad as during the last financial crisis.
“To date, the weakening trend for job advertising is more like the 1995-96 experience, rather than the sharp slowdown during the global financial crisis in 2008-09”, said Mr Colhoun. The unemployment rate rose 0.4 percent between June 1995 and December 1996.
According to brokerage firm CommSec, the possibility of an interest rate cut from the RBA has increased, following the release of the job ads data.
CommSec Chief Economist, Craig James said “job ads are a forward-looking indicator of the broader job market. So in simple terms if fewer employers are seeking staff, employment is likely to remain flat in coming months.”
“The worst case scenario is that employers are not hiring and at the same time they are trimming staff. As a result employment numbers will ease in coming months with unemployment drifting higher.
“The troubling aspect for the Reserve Bank is how quickly economic momentum has been lost. Up to March the economy appeared to be chugging along. But since April, business and consumer confidence has fallen sharply, affecting spending and hiring decisions”, Mr James said.
The ANZ data comes just days before the official September employment report, which is due out on Thursday. Analysts polled by Reuters expect a rise in employment of 10,000, with the unemployment rate to stay at 5.3 percent.