ANZ job ads for May are out and are worse than expected at minus 2.4%:
Job advertisements declined 2.4% m/m in May after falling 1.7% m/m in April to the lowest level so far this cycle. Advertisements are now 28% below their most recent peak at the end of 2010. In trend terms, job advertisements declined 0.4% m/m in May to be 17% below year-ago levels.
While job advertising on the internet fell 2.3% m/m in May, newspaper job ads again fell more sharply, dropping 4.7% m/m.
With the exception of Queensland and the ACT, newspaper job advertising fell in all states and territories. Newspaper job advertising is in trend decline in all states and territories, with NSW continuing to record the least severe rate of decline.
ANZ Chief Economist (Australia), Ivan Colhoun said:
Job advertising weakened again in May and has now recorded three consecutive monthly declines. In the past this has been a reliable signal for the trend in the series and argues that the apparent stabilisation in the early months of 2013 has not been sustained. In trend terms, job advertising is declining 0.4% m/m, a relatively moderate rate of decline, but one that is likely to be consistent, unfortunately, with a continuing moderate rise in Australia’s unemployment rate.
Job advertising is declining across all states and territories, but least strongly in NSW, in keeping with a number of other indicators that suggest the NSW economy is beginning to show some improvement. Advertising is very weak in Victoria and Tasmania, consistent with other indicators suggesting these economies are relatively underperforming at the present time.
The RBA Board meets next Tuesday and is not expected to alter interest rates, owing in part to the more supportive level of the AUD for the economy in recent weeks. ANZ continues to expect that the next move in interest rates will be a further cut, driven by a likely continuing rise in unemployment as signalled by the declining trend for job advertising. Historically, interest rates have not risen until some months after there have been three successive monthly increases in job ads. Rising official interest rates in Australia appears to remain a distant prospect at this point in time.
The down trend has resumed. Unemployment will slowly climb as well.
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.
