ANZ job ads whacked

ANZ job ads for May are out and got thumped. As usual, the accompanying commentary comes with the rhetoric of boom ahead. I think it’s about time we called this what it is: Futureboom. The worse the data, the bigger the Futureboom, it seems:

Total job advertisements on the internet and in newspapers decreased by 6.5% inMay to be 8.3% higher than a year earlier.

• Newspaper job ads fell by 2.7%, while internet job advertising declined by 6.6%.Newspaper advertising has now fallen for three consecutive months, while internetadvertising has fallen for two consecutive months.

• In trend terms, total job ads fell by 0.5% in May with the annual growth rate slowingto 13.5%.

ANZ Chief Economist Warren Hogan said:

• Job advertising fell in May, with advertising in April downwardly revised to amonthly fall of 0.4%. This is the first time we have seen two consecutive monthsof negative job advertising since July 2009. The slowing in job advertisement growth in 2011 thus far has been broadly in line with slowing in employment growth.

• The annual rate of growth of job ads has slowed over the past six months and is now just 8.5% above year ago levels. Newspaper ads are 5.2% lower than a yearago. We have seen many monthly economic indicators impacted by seasonalfactors related to ANZAC day and Easter falling closely together this year. Wesuspect the recent dip in job advertising could be overstated because of this.

• Job advertising in May was broadly in line with November 2010 levels. Similarly,the unemployment rate in April 2011 has remained broadly in line with December2010 levels at 4.9%. Recent trends in the job ads series indicate a stable labourmarket for the next three to six months or so with unemployment likely to hoveraround 4.75% to 5%.

• Recent stronger investment spending data in Q1 combined with very robustinvestment intentions suggest to us that the labour market will strengthen later inthe year as capital investment picks up. We expect the unemployment rate togradually trend down over the year ahead.

• ANZ is forecasting an increase of 14,000 jobs in May which we expect will leavethe unemployment rate at 4.9%.• Newspaper job advertising has been soft across most of the states of Australia.NSW and the Northern Territory have the strongest newspaper job advertisingmarkets in 2011. Looking forward, evidence of the multi-speed economy is likelyto become more pronounced as the investment boom gets underway over thenext two years. We would expect Western Australia, Queensland and New SouthWales to experience the strongest labour markets.     

• With the unemployment rate below 5% and likely to remain that way or headlower over the next year, the Reserve Bank will maintain a strong tightening biasin it’s monetary policy. We expect a further 25bp increase in the RBA cash rateover the next three months in response to tightening labour market conditionsand rising inflation pressures.

Total job advertisements
The ANZ Job Advertisements Series shows the total number of jobs advertised in major metropolitan newspapers and on the internet fell by 6.5% in May to an average of 182,087 advertisements per week (seasonally adjusted). This follows a 0.4% decrease in April.

The number of job advertisements is now 8.3% higher than a year ago, a deceleration from the previous month. The annual rate of growth in job advertising is now below its long-term trend of 10.7%. The total number of job ads remains 34.8% below the all-time peak achieved in April 2008. This suggests that the labour market is not yet as tight as it was at the height of the first phase of the commodity boom.
In trend terms, growth in job advertisements fell by 0.5% in May. This follows a slight fall of 0.1% in April. Monthly trend growth in total job ads has now been slowing since January 2011. In annual terms, trend growth in total job advertisements eased to 13.5% in May after reaching a near six-year high of 36.2% in September 2010 (see Table 1).

Newspaper job advertisements
The number of job advertisements in major metropolitan newspapers fell by 2.7% in May to be 5.3% lower than year ago (see Table 2). The seasonally adjusted weekly average number of job advertisements was 8,837 in May. This was 10.3% lower than the recent peak of 9,856 in March 2010. While some of the fall in newspaper job advertisements can be attributed to a trend shift toward internet advertisements, we have now seen the total number of job advertisements fall for two consecutive months.

In trend terms, the number of newspaper job advertisements fell 0.7% in May and was 4.8% lower than a year ago.

In May, newspaper job advertisements rose in the Northern Territory (+8.4% m/m), South Australia (+2.0% m/m) and the ACT (+1.9% m/m). Newspaper job ads fell in Victoria (-5.4% m/m), New South Wales (-4.1% m/m), Western Australia (-3.6% m/m) and Tasmania (-3.4% m/m). Queensland also experienced a decline (-0.8%), although the level of newspaper job advertisements in Queensland is still well above the pre-flood level in December 2010 (see Table 3).

Internet job advertisements
The number of internet job advertisements fell by 6.6% in May. This is broadly in line with November 2010 levels. Internet job advertisements are now 9.1% higher than a year ago. In trend terms, internet job advertisements fell by 0.5% in May to be 14.6% higher than a year earlier (see Table 4). Annual trend growth in internet job ads has continued to slow in 2011, albeit from a considerably high growth rate post the GFC.

Make sure you scroll to the end. There are some great charts. The first charts the correlation between job ads and employment growth:

ANZ have moved the darker blue line of jobs ads forward six months to show the relationshisp but that also suggests that change in the growth rate of ads lead employment growth by six months or so.

I’m especially fond of the following:

There’s a beautiful symmetry between the 05-07 and the 09-11 periods. Followed by a bang in the first, and whimper in the second. We might call this chart “boom averted”. Although I think it unlikely, what a shocker it would be if a slowing US were to drag the world towards recession now…Futureboom may never be!

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)

Comments

  1. The size of the Futureboom is inversely proportional badness (?) of the data.

    I fully expect to start reading about the one-in-a-thousand-year boom soon.

  2. That’s a pretty solid looking downtrend. Seems consistent with the raft of weak economic data of late. ABS May labour force data (Wednesday?) might be interesting.

  3. Are job ads a good leading indicator for employment numbers later in the year? I hear a few stories floating around of big companies enacting head count freezes and so forth that point to some not so good news in the months ahead.

  4. I need to see more data to believe that we are in a recession. Until then, I think, we are experiencing the boom that we had to have.

      • Yeah, we’re having a once-in-a-thousand-year boom where 0.l% of the population lives, and a recession where 99.9% of the population lives. But don’t worry, the RBA is looking after the 0.1%.

        After all, poor old Gina and Twiggy are short of a quid, and need help to keep wage pressures under control.

        • May i suggest that us workers rise up and seize the means of production while there are still enough of us working to make a difference ….

  5. Check out the huge jump in WA job ads in recent months as we gear up for Futureboom.

    • Peel the mining jobs out of the mix then lets talk. That will tell us the real numbers.

  6. Forget the stupid jobs ad numbers – the only real number is the number in full time productive work. This means primary production and manufacturing for our economy and what we cabn export.

    You can’t hand jobs to China and have them here as well. Free trade is nonsense driven by multi nationals to either grab markets and move jobs to low labour cost countries.

    Jobs also evaporate when companies like Heinz are allowed to take over Australian companies and their factories in order to gain market share and a worthwhile brand. They then close the factory, move production overseas asap, hurting Australian jobs and farmers to a huge extent.

    Pollies are to blame for this.

    • You cannot blame free trade for jobs loss, we are no longer competitive, that seems to be the problem.

      And Heinz. I am sure that an Australian company would come to the same conclusion as Heinz at some stage. It’s cheaper overseas, Australia is a rip off.

      • “It’s cheaper overseas, Australia is a rip off.”

        Exactly right, and not just in China, India, etc. It’s not cheaper in the US too.

        • “It’s cheaper overseas, Australia is a rip off.”

          Exactly right, and not just in China, India, etc. It’s NOW cheaper in the US too.

  7. I’m finding a direct inverse correlation between futureboom and futurebust. Wow , I should be on TV.

  8. H&H
    Yes, I have told about it by market economists. They even told me that the boom will last for the next 20, 50…100 years.

    I am all set for it. Unfortunately, i have told that QE1 will be followed by QE2 and QEX, the Euro will disappear, China will face huge social upheaval -but Australia will go on to have Boom1, followed by Boom mark 2 and X.

    Question is – who has the best crystal ball?
    My money is on shorting the market, shorting the AUD and shorting the market economists for now. My ball is not hazy.

    • “Question is – who has the best crystal ball?
      My money is on shorting the market, shorting the AUD and shorting the market economists for now. My ball is not hazy”

      Spot on H & H. looks clear to me

  9. Torchwood1979

    I love the QLD and WA charts. It looks like even before the GFC hit job ads were starting to fall off a cliff in QLD and the jobs slide had already started in WA. Hmm…

    In 2011 nationally the trend is evident; unemployment is a stirring monster and IMO the bullhawks underestimate how quickly it can wake up. DE’s Godzilla debt monster doesn’t have to move much to cause destruction but unemployment is King Kong just waiting to break free of his bonds. Having one roaming the streets smashing houses, shops and new car sales would be bad enough but two could be an incredibly bad combination.

  10. On a brighter note. You can tell things are bad when the waitresses get better looking.

  11. “NSW and the Northern Territory have the strongest newspaper job advertising markets in 2011” Not surprised – no one can bloody well afford to live there so there’s no one to fill the jobs.

  12. ‘Not surprised – no one can bloody well afford to live there so there’s no one to fill the jobs.’

    ‘We need to import more skilled workers’ – we need a immigration boom. Don’t we? hmmm

  13. “ANZ is forecasting an increase of 14,000 jobs in May which we expect will leavethe unemployment rate at 4.9%”

    It’s alright then, but their record on forecasts – like most market economists is so poor it’s wonder why anyone would listen to them.

  14. Is there any correlation between job ads and and subsequent employment figures? How close is the correlation?