ANZ job ads was out earlier today. It continues its recent trend of slowing growth:
Total job advertisements on the internet and in newspapers decreased by 0.6% in August. Annual growth in total job advertisements decelerated to 6.1% y/y.
• Newspaper job ads fell by 3.0% m/m, while internet job advertising decreased by 0.5% m/m. Newspaper advertising is now 15.6% lower than a year ago, while internet advertising is now 7.3% higher over the same period, in part reflecting the continuing structural shift to online advertising.
• In trend terms, total job ads fell by 0.5% m/m in August with the annual growth rate slowing to 6.2% y/y. The monthly trend in total job advertisements began slowing in January and has been negative since April this year.
Here is the history of the series:
I find this chart fascinating. More than any other it shows precisely what last year’s interest rate rises achieved. Basically, rather than accelerate into a 2007 like blowoff, with employment and inflation surging towards a bust, the boom has been choked off in the foothills, as it were.
Returning to the release, Warren Hogan offers the following analysis:
The number of job advertisements declined again in August, falling 0.6% to be just 6.1% above year ago levels. This is the second consecutive fall in job advertising and the fourth monthly decline in the past five months. Over the six months to August 2011 total job advertising has fallen by 3.4%. Job advertising is clearly in a cyclical slowdown in 2011, consistent with other indicators of both economic activity and labour demand.
• The decline in newspaper job advertising has been more severe, falling 3.0% in August to be 15.6% lower than a year ago. Newspaper job ads have fallen in each of the last six months and down 14.7% over this time. While some of this relative weakness in newspaper advertising likely reflects a compositional shift in advertising trends towards the internet, recent history suggests newspaper ads do lead overall advertising trends. Internet advertising trends have been less pronounced with a smaller monthly fall of 0.5% recorded and the level still 7.3% higher than a year ago.
• The declines in job advertising have been modest thus far. This suggests a soft patch for Australian economic growth associated with stagnant employment conditions rather than a sharp slowdown that will drive a rapid rise in unemployment. ANZ has recently reviewed its employment forecasts and expect the unemployment rate to continue to drift up to around 5.25% to 5.5% over the next 12 months. At this stage we do not believe the RBA will see this as a trigger for an easing of monetary policy. Inflation pressures remain and the uplift in mining and construction activity will cap the rise in unemployment in 2012.
• We will be watching job advertising trends closely over the second half of 2011 as an indicator of likely economic momentum in 2012. With unemployment likely to rise further from current levels, any noticeable further weakness in labour demand could change the RBA’s assessment of medium-term inflation risks. As such, the ANZ Job Ads Series will remain a critical indicator of economic momentum over the months ahead.
• The official employment numbers are due for release this Thursday, 9 September.ANZ expects some modest growth in total employment, lead by full-time jobs following the recent softness. Employment is forecast to rise by 18,000 in August. The unemployment rate is expected to ease slightly to 5.0% in August, before heading up to 5 ¼% by the end of 2011 and 5½% by mid 2012.
I disagree on the official employment number later this week, which I expect to show greater weakness for August. However, that is neither here nor there. On the general assessment of the trends, I completely agree. To make the point most clearly, here is the chart of newspaper ads leading employment figures:
