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9 Feb 2015
Encouraging signs in Australian labour market - ANZ
FXStreet (Bali) - According to ANZ Chief Economist Warren Hogan, the eighth consecutive monthly rise in ANZ job ads is an encouraging sign that new labour demand continues to improve in certain sectors of the Australian economy.
Key Quotes
"Job advertisements rose a further 1.3% m/m in January to record their eighth consecutive monthly rise (in seasonally adjusted terms). Job ads have now trended higher for 15 consecutive months and are up 10.0% over the year to January."
"The continued strength in January was driven by internet job ads, which rose 1.5% m/m. In annual terms, internet job ads are running at 14.8% y/y, the fastest rate since April 2011. This contrasts with newspaper job ads which declined by 6.7% m/m, to be down 23.8% y/y. The pace of deterioration in newspaper job ads appears to have stepped up in recent months, although this series is particularly volatile and makes up only 3% of overall ANZ job ads."
"Newspaper job ads trending down in all states and territories with the exception of NSW, with recent weakness in WA and the NT particularly pronounced."
ANZ Chief Economist Warren Hogan
“The eighth consecutive monthly rise in ANZ job ads is an encouraging sign that new labour demand continues to improve in certain sectors of the Australian economy. In particular, the relative strength of NSW job ads stands out, and is consistent with other indicators highlighting the state’s outperformance. While we remain cautious about interpretation of the official labour market data, the recent stabilisation in the unemployment rate would appear a little more consistent with recent trends in ANZ job advertisements. A gap between job ads and the official data remains however, most likely reflecting a higher rate of retrenchments in industries such as manufacturing and resources, which suggests that overall labour demand is struggling to keep pace with the flow of new workers into the economy. We do not expect a significant change in this dynamic amidst below trend economic growth outcomes, with a further rise in the unemployment rate to 6½% through 2015.
“The recent decision by the RBA to cut the cash rate for the first time in 18 months was in part justified by the downgrade to the Bank’s economic growth and labour market forecasts. The impact of a 25bp cut however is marginal in terms of growth outcomes, and the growth outlook also remains highly dependent on the path of commodity prices and the currency. In particular, the RBA is highly cognisant of easing by a range of global central banks which has the potential to drive further capital inflow into Australia and put upward pressure on the AUD. Importantly, the now softer inflation trajectory allows the RBA to support the domestic economy further without threatening the inflation target. A further easing of monetary policy is highly likely, and we expect a follow-up rate cut from the RBA, most likely in March.”
Key Quotes
"Job advertisements rose a further 1.3% m/m in January to record their eighth consecutive monthly rise (in seasonally adjusted terms). Job ads have now trended higher for 15 consecutive months and are up 10.0% over the year to January."
"The continued strength in January was driven by internet job ads, which rose 1.5% m/m. In annual terms, internet job ads are running at 14.8% y/y, the fastest rate since April 2011. This contrasts with newspaper job ads which declined by 6.7% m/m, to be down 23.8% y/y. The pace of deterioration in newspaper job ads appears to have stepped up in recent months, although this series is particularly volatile and makes up only 3% of overall ANZ job ads."
"Newspaper job ads trending down in all states and territories with the exception of NSW, with recent weakness in WA and the NT particularly pronounced."
ANZ Chief Economist Warren Hogan
“The eighth consecutive monthly rise in ANZ job ads is an encouraging sign that new labour demand continues to improve in certain sectors of the Australian economy. In particular, the relative strength of NSW job ads stands out, and is consistent with other indicators highlighting the state’s outperformance. While we remain cautious about interpretation of the official labour market data, the recent stabilisation in the unemployment rate would appear a little more consistent with recent trends in ANZ job advertisements. A gap between job ads and the official data remains however, most likely reflecting a higher rate of retrenchments in industries such as manufacturing and resources, which suggests that overall labour demand is struggling to keep pace with the flow of new workers into the economy. We do not expect a significant change in this dynamic amidst below trend economic growth outcomes, with a further rise in the unemployment rate to 6½% through 2015.
“The recent decision by the RBA to cut the cash rate for the first time in 18 months was in part justified by the downgrade to the Bank’s economic growth and labour market forecasts. The impact of a 25bp cut however is marginal in terms of growth outcomes, and the growth outlook also remains highly dependent on the path of commodity prices and the currency. In particular, the RBA is highly cognisant of easing by a range of global central banks which has the potential to drive further capital inflow into Australia and put upward pressure on the AUD. Importantly, the now softer inflation trajectory allows the RBA to support the domestic economy further without threatening the inflation target. A further easing of monetary policy is highly likely, and we expect a follow-up rate cut from the RBA, most likely in March.”