More mediocre data today with the release of ANZ job ads:
Job advertisements declined 1.5% m/m in March after rising by 3.0% m/m in February. Despite the fall in March, the level of job advertisements on the internet and in newspapers is higher than at the end of last year. In trend terms, job advertising rose 0.2% m/m in March to be 17.0% below year-ago levels.
While job advertising on the internet declined 1.6% m/m in March, newspaper job ads rose by 1.8% m/m. This is likely to reflect different patterns in advertising across the two mediums ahead of the Easter long weekend.
Newspaper job advertising in the most populous state of NSW rose for a second consecutive month. Newspaper job advertisements also rose in the ACT and NT in March, the latter sharply although job advertising in the NT is typically volatile. Newspaper job advertising contracted in Queensland and Tasmania by 8% and 6%, respectively.
ANZ Head of Australian Macroeconomics, Katie Dean said:
After notable weakness at the end of last year, job advertising trends have shown signs of stabilising; looking through the monthly volatility, job advertisements are now modestly higher than their levels three months ago. However, at this stage, it is too early to tell whether this indicates a sustained pick-up in hiring intentions.
Some of the improvement in job advertising is likely to reflect a degree of ‘pent up’ labour demand. Due to heightened uncertainty about global economic and political developments at the end of last year, businesses may have held off from hiring staff. This same reasoning is likely to have been behind the recovery in job advertising in early 2012 which did not last: job advertising deteriorated through the year.
While lower interest rates are beginning to support stronger domestic economic activity, the positive effects of accommodative monetary policy have been mixed to date. Alongside improvements in consumer confidence and equity prices, household spending has started to pick up, evident in increases in house prices and a tentative improvement in retail sales. However, this has not yet translated into improved business confidence, a precursor for businesses investing in both capital and labour.
The labour market and activity in the non-mining sectors of the economy are of key interest to the RBA. Further data on these areas will give the Bank a clearer idea of whether monetary policy easing to date will be enough to see the economy transition relatively smoothly from mining to non-mining activity. Therefore, we retain our view that the RBA is in ‘wait and see’ mode.
Together with the ABS measure of job vacancies which fell sharply in February, these data suggest that there is a degree of slack in the labour market not yet evident in the official labour force numbers. For this reason, ANZ continues to expect the unemployment rate to drift modestly higher but to have remained unchanged at 5.4 % in March. We forecast for there to have been 5,000 jobs created in the month.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
