Job advertisements rose for a fifth straight month in July, hitting their highest level since 2011, according to the monthly report from the ANZ Bank.
The bank says the sharp rise from June suggests that the solid rise in jobs growth so far this year has more to run through the rest of 2017.
The ANZ report is one of three private sector surveys this week which are regarded as solid indicators – later today the most important, the National Australia Bank’s business conditions and confidence survey for July is due for release, with another solid report expected.
And tomorrow the Westpac/Melbourne Institute survey of consumer sentiment will be released with another OK, but not strong report expected.
The ANZ said yesterday that job ads increased by 1.5% in July, from June when they rose 2.7%, up 12.8% from July last year and at their highest since late 2011.
After sharp increases in employment from March to June, the official jobless data seems to have now caught up with the strength seen in job ads and helped the jobless rate down to 5.6% from 5.8% at the start of the year. The Australian Bureau of Statistics said in its June Labour Force report that “Full-time employment has increased by around 187,000 persons since September 2016, with particular strength over the past five months, averaging around 30,000 persons per month," Chief Economist for the ABS Bruce Hockman said.
"Full-time employment now accounts for about 68 per cent of employment, however this is down from around 72 per cent a decade ago."
"Over the past year, trend employment increased by 227,000 persons (or 1.9 per cent), which is the same as the average year-on-year growth over the past 20 years. It has increased since December 2016, when the year-on-year growth was at 0.8 per cent and reflected relatively low employment growth through most of 2016.{
“Recent data has shown a clear improvement in labour market conditions consistent with elevated business conditions, profitability and capacity utilisation,” said David Plank, ANZ’s head of Australian economics said in a statement with yesterday’s report.
He estimated that leading indicators, including job ads, pointed to jobs growth of 15,000 to 20,000 per month in the near term.
"In particular, the strength in full-time employment and a solid increase in hours worked (near 3.3% y/y) are quite encouraging. Among other things we think this strength has contributed to the lift in consumer confidence from its recent low point in April.Broadly, forward indicators and survey based measures point towards near-term jobs growth in the order of 15-20k per month,” Mr Plank said.
However, Mr Plank also saw hurdles ahead for the labour market, saying underutilisation rates remained high.
We also don’t expect the recent strong pace of public sector jobs growth to continue. Lastly, despite the improvement in labour conditions, wage growth is sluggish and is expected to remain so. Given the importance of the labour market and wage growth to the course of monetary policy, we will be closely watching the Q2 Wage Price Index number, out on August 16.”
