Tag: Job Ads

ANZ says their Australian Job Ads plummeted in May, but recovered strongly in the last week of the month, indicating much of the decline for the month as a whole was due to the April ‘holiday year effect’ and the timing of the election.

In seasonally adjusted terms, job ads fell 8.4% m/m and 14.9% y/y. This is
the weakest monthly result since Jan-2010 and the steepest annual fall since 2013. In trend terms, job ads fell 1.8% m/m and 10.1% y/y.

There is an alignment it seems between the employment growth and ANZ job ads growth.

ANZ says that Australian Job Advertisements was flat (0.0% m/m) in March, after easing slightly (-0.4%) in February. The number of job ads currently sits 11.5% higher than a year ago.

In trend terms, job ads were up 0.8% m/m in March, edging down from a 0.9% rise in the previous month. The annual trend rate slowed from 12.2% in February to 11.8% last month.

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

“Despite ANZ Job Ads easing slightly in the past two months, the strong January result means that job ads are up 4.4% q/q in Q1. Interestingly, after a period of employment growth overshooting growth in job ads, the two series appear to be converging once more.

Despite the recent stability in ANZ Job Ads, the labour market remains robust. The level of job ads is consistent with continued strength in employment growth, though we do expect some slowdown in the pace in which jobs are added. Businesses reported record conditions in February and the uptrend in capacity utilisation suggests that the unemployment rate will slowly grind lower through the year. The recent uptick in the unemployment and underemployment rate, however, shows that spare capacity is reducing only gradually indicating that wage growth is likely to remain muted for some time yet.”

In seasonally adjusted terms, ANZ Job Advertisements jumped 6.2% m/m in January, more than reversing the 2.7% fall in the previous month. On an annual basis, job ads are up 13.8%, a step up from the 11.4% y/y rise in December.

In trend terms, job ads were up 0.7% m/m in January following a similar increase in the previous month. The annual trend rate slowed from 12.3% in December to 11.9% in January.

ANZ says:

It is encouraging to see a strong recovery in Job Ads last month after a slight retreat in December. The bounce in January is in line with ongoing strength in business conditions, capacity utilisation and other surveys of employment conditions. Taken together, there is some evidence that the slowdown in the trend we saw in H2 last year may reverse in the coming months. That said, given the seasonal volatility often associated with this time of year, it is perhaps too early to tell for sure.

In recent months the RBA has noted the strong gains in employment across states, as well as the increase in labour force participation. The RBA will likely see the Q4 CPI result as broadly positive, with clear signs that inflationary pressures have stabilised, albeit at a level below the policy band. All eyes now turn to the Q4 wage number out on 21 February. We see a rise of 0.5% q/q as being consistent with our view that the RBA will raise rates this year in an effort to bring the real cash rate back to zero.

The latest ANZ Job Ads data for December 2017, in seasonally adjusted terms, fell 2.3% largely unwinding the increase over the previous two months.

On an annual basis job ads are up 11.4%, a slight moderation from 12.0% y/y growth the previous month.

ANZ says:

The labour market in 2017 was characterised by widespread job growth (particularly in full time jobs), an increase in participation and a fall in the unemployment rate to a four-year low of 5.4%. Growth in ANZ Job Ads provided a leading signal of this strong performance.

As such, the fall in job ads in December might be a source of concern. There can be considerable volatility around this time of year, however. For this reason we are not unduly worried around the drop in December job ads. We note, for instance, that job ads fell nearly 2% in December 2016 without signalling a turn in labour market conditions. Having said this, the easing in the trend pace of job ads growth in the fourth quarter lends support to our view that we may see a slowing in employment growth over the coming months. We believe that, after 14 straight months of growth, employment has overshot the levels implied by job ads and as such a period of moderation in jobs growth is likely.

In seasonally adjusted terms, ANZ Job Advertisements rose 1.5% in November following a 1.5% increase in the prior month. On an annual basis Job Advertisements are up 12.1% a tick down from the 12.5% y/y pace last month.

In trend terms, job ads were up 0.7% m/m in November. There has been a slight slowdown in the m/m trend which averaged 1.16% and 0.94% m/m over Q2 and Q3 respectively.

Another steady rise in ANZ Job Advertisements in November along with other leading indicators suggests a positive outlook for the labour market, particularly given the solid prospects for economic growth. Labour market performance through 2017 has been robust, with employment concentrated in full time jobs and picking up across all states.

That said, the improvement in labour market conditions has not yet translated into higher wage growth, as indicated in the weaker-than-expected Q3 number. Clearly, a further reduction in labour market spare capacity is required for a sustained increase in wage growth. On this front, it is encouraging to see business surveys report that firms are having an increasingly difficult time finding suitable labour. In the past this has resulted in firms bidding up wages. Indeed the RBA, through its liaison program, has already noted some evidence of this occurring in small pockets. As the unemployment rate grinds down further over the coming year, we expect this to become more widespread

 

ANZ Job Advertisements rose 1.4% m/m in October, more than reversing the 0.7% decline previously. They now sit 12.5% higher than they did a year ago.

But in trend terms, job ads were up 0.5% m/m in October after a 0.7% rise the previous month. Annual trend growth eased slightly, from 12.4% in September to 12.2%.

ANZ said:

The bounce in ANZ Australian Job Advertisements in October is consistent with elevated business conditions and capacity utilisation. The slight slowing in the month-on-month trend growth since August supports our view that employment growth is likely to moderate a touch after this extraordinary period of strength. We also note that the official employment data appears to overshot the level implied by ANZ Job Advertisements.

Even as the labour market strengthens, with the unemployment rate falling to a four-year low of 5.5% in September, solid growth in nominal wages continues to remain elusive. The experiences of other advanced economies that are at or close to levels of full employment suggest that global factors are keeping nominal wage growth low. Even so, we think it
reasonable to expect some upward pressure on wages as the labour market tightens, given some evidence that sectors experiencing stronger labour demand have stronger growth in average weekly wages. As such, we find the fall in our monthly estimate of underemployment quite encouraging.

We will be closely watching the Q3 Wage Price Index, out next week, for any signs of improvement in underlying conditions, though this may be difficult to discern given the impact of the higher minimum wage.

ANZ says Job Advertisements rose 2.0% m/m in August, the sixth straight rise. Job advertisements currently sit 13.3% higher than a year ago.

In trend terms, job ads were up 1.3% m/m in August following a 1.4% rise in the previous month. Annual trend growth picked up slightly, rising from 11.6% in July to 12.5% in August.

ANZ commented:

Job advertisements continue their period of strength, consistent with robust business conditions. Together with other forward indicators and survey-based measures, this strength suggests some downside risk to the unemployment rate in the near term, with employment expected to rise in the order of 15–20k per month over the period ahead.

While the RBA is likely to find the ongoing improvement in labour market conditions encouraging, persistently low wage growth presents some uncertainty to the outlook for both consumption and inflation. The Q2 GDP report, later this week, will provide information on how the economy is tracking overall. We do not expect consumption growth to be particularly weak in Q2 given the increase in household disposable income from additional hours worked. Additionally, the higher than usual increase in the minimum wage (in effect since 1 July) will likely provide some support to spending in Q3.

That said, given the elevated levels of existing household debt and already low savings rate, we find it difficult to envision a sustained increase in consumption growth without some pickup in wage growth and consumer confidence. This will act as a constraint on the acceleration in GDP growth even as business investment picks-up.

ANZ Job Advertisements continue to trend up, rising 1.5% m/m in July in seasonally adjusted terms. Total job ads are now up 6.5% since the beginning of the year. Annual growth picked up from 10.5% in June to 12.8% this month.

In trend terms Job Advertisements were up 1.0% m/m in July following a 1.3% rise in the previous month. The trend growth rate has averaged 1.1% m/m over the first seven months of the year, compared to 0.3% m/m over the same period a year ago.

ANZ said:

“Recent data has shown a clear improvement in labour market conditions consistent with elevated business conditions, profitability and capacity utilisation.particular, the strength in full-time employment and a solid increase in hours worked (near 3.3% y/y) are quite encouraging. Among other things we think this strength has contributed to the lift in consumer
confidence from its recent low point in April.

That said, several challenges remain and we expect the pace of improvement to moderate over the medium term. First, the level of underutilisation remains high and business surveys suggest
that it is likely to fall only gradually. Second, the drivers of growth over the next few years look to be less labour intensive given the slowdown in housing construction and the expected
contribution of labour-lite LNG exports to growth. We also don’t expect the recent strong pace of public sector jobs growth to continue. Lastly, despite the improvement in labour conditions,
wage growth is sluggish and is expected to remain so.

Broadly, forward indicators and survey based measures point towards near-term jobs growth in the order of 15-20k per month. Given the importance of the labour market and wage growth to the course of monetary policy, we will be closely watching the Q2 Wage Price Index number, out on August 16.”

The ANZ Job Advertisements index rose 1.4% m/m in April in seasonally adjusted terms, following a more modest 0.8% rise the previous month.

Annual growth in job ads jumped to 10.1% this month from 7.1% in March.

Trend growth in job ads rose by a more modest 0.6% m/m in April. The trend m/m growth rate has remained within the 0.6-0.7% range since June last year. In annual terms, the trend rate rose to 7.7% y/y this month from 7.5% y/y in March.

“The improvement in ANZ Job Ads and other leading employment indicators suggests we may be in for a sustained period of strength in the official employment data following the strong lift in jobs in March.

After tracking around 5¾% for most of 2016, unemployment has recently moved higher. Meanwhile, business conditions and confidence remain well above the long run average, and capacity utilisation now sits at its highest level since 2010.

The jump in employment numbers in March, while encouraging, has not fully closed the gap between the official numbers and survey-based methods. In our view, employment is likely to show further strength over the coming months to close this gap. In time this should be reflected in a pick-up in wage growth. Given the spare capacity in the labour market, however, any improvement in wage growth is likely to be gradual, suggesting that labour cost pressures will continue to remain subdued for some time.”

ANZ says Job advertisements rose 0.3% m/m in March in seasonally adjusted terms, partially reversing the 0.8% fall in the previous month. Annual growth in job ads edged up to 7.0% from 6.9% in February.

Trend growth in job ads eased somewhat to 0.4% m/m in March after averaging 0.6% m/m growth over the last eight months. The annual trend rate firmed up in March and now stands at 6.8% y/y. Annual growth in Q1 2017 averaged 6.5% compared to 5.3% the previous quarter.

“It is encouraging to see an improvement in job ads in March, albeit modest, especially given the disappointing jobs report in February. While somewhat at odds with recent employment data, the improvement in job ads is consistent with other forward indicators such as our Labour Market Conditions Index and solid business conditions. As such, we continue to expect a gradual improvement in labour market conditions through 2017.

The labour market remains a key variable for the inflation and spending outlook. In recent times, persistently low inflation and a high degree of spare capacity have weighed on labour incomes. If weak income growth persists it may have implications for consumer spending given the already high levels of household debt and the rapid decrease in the household savings rate over the past two years. More recently, we note that our measure of households’ confidence in their future finances has fallen to its long term average. This could have implications for consumer spending, especially if income growth continues to be weak.”