Nothing for the Reserve Bank to worry at today’s board meeting about from the latest reports from the ANZ jobs ads series and a private reading on inflation.
The RBA board is widely expected to leave rates on hold. A statement will be issued at 2.30 pm.
Job ads resumed their downward trajectory last month as internet advertising fell sharply and inflation remains well under the RBA’s target band of 2% to 3%.
In fact the news will encourage the central bank to leave rates at 3% for another month.
The ANZ bank said yesterday its June report showed there was a 6.7% fall in job ad last month as a small rise in newspaper ads was swamped by a sharper than forecast fall in net ads.
The report swamped the small 0.2% fall in May which had started analysts wondering if the long fall in ads had run out of steam.
The latest news means analysts will start getting toey about the June labour force figures, due out on Thursday.
"The ANZ Job Advertisements Series released today showed the total number of jobs advertised in major metropolitan newspapers and on the internet fell by 6.7% in June to a weekly average of 127,346 per week.
"This follows a 0.2% fall in May. The total number of advertisements in June was 51.4% lower than 12 months earlier.
The number of job advertisements in major metropolitan newspapers increased by 0.9% in June to an average of 8,192 per week. This follows a 1.0% drop in May. Newspaper advertisements are now 50.7% lower than in June 2008," The ANZ said.
"The number of internet job advertisements fell by 7.2% in June to average 119,154 per week, and were 51.5% lower than 12 months earlier."
The ANZ’s head of Australian economics, Warren Hogan said:
"With both the internet and newspaper series down by over half in the past year, this key leading indicator of labour demand suggests that hiring intentions by Australian business are still weak.
"Thus far however, this retrenchment in new labour demand has not shown up as a significant fall in the level of employment in the economy.
"Business may not be hiring but so far it appears that labour shedding has been quite subdued in comparison to previous economic downturns.
"Indeed, labour hoarding appears to be lasting longer in this economic downturn than in the past."
Mr Hogan said the ANZ expects employment to fall by 32,000 in the number of people unemployed and a rise in the unemployment rate to 5.9^ from 5.7% in May.
"With both the internet and newspaper series down by over half in the past year, this key leading indicator of labour demand suggests that hiring intentions by Australian business are still weak," he said in yesterday’s statement with the figures.
"Thus far however, this retrenchment in new labour demand has not shown up as a significant fall in the level of employment in the economy.
"Business may not be hiring but so far it appears that labour shedding has been quite subdued in comparison to previous economic downturns. Indeed, labour hoarding appears to be lasting longer in this economic downturn than in the past.
"Just about all of the increase in the unemployment rate in Australia has been driven by labour force growth (due to both high participation and rising natural growth) as opposed to job losses.
"The level of total employment in Australia, recorded as 10.79m people in May 2009, remains close to the peak seen in October last year of 10.82m.
"Key to the Australian economy’s future is the labour market and whether the recent trend for stronger employment outcomes continues or labour shedding picks up pace over the second half of the year.
"In recent months the official statistics have been encouraging with only small declines in employment recorded.
Better news from the private monthly inflation survey from TD Securities and the Melbourne Institute which seeks to replicate the Reserve Bank’s preferred method of assessing inflation.
It rose in June after a couple of easing months, but the annual rate remains at a seven year low.
The survey showed inflation rose 0.4% in June, following a 0.3% fall in May and no change in April.
That put the annual rate at 1.4%, the lowest annual rate since the start of the series in mid-2002. The annual rate in May was 1.5%.
The annual rate is well under the Reserve Bank’s 2%-3% target range over time.
