The number of jobs being advertised has hit a 17-month high, suggesting the labour market is improving despite the shock jump in July’s unemployment rate.
The growth comes after a surprise rise in joblessness in July, when official figures showed unemployment hit a 12-year high of 6.4 per cent.
The ANZ monthly job ads data released Monday back up Reserve Bank Governor Glenn Stevens’ comments last week when he told an Adelaide business audience that his researchers were seeing “a slight improvement in the labour market this year”.
Stevens said monthly Australian Bureau of Statistics unemployment figures aren’t much use and interpretation of single month shifts is “hazardous”.
The Reserve Bank, Stevens said, was seeing a market with “a degree of spare capacity”.
The ANZ job ads data released Monday suggest Stevens was on the money.
Job ads rose 1.5 per cent in August and were up eight per cent over the year to date, according to ANZ’s report.
ANZ chief economist Warren Hogan said the rise in job ads, along with a number of other key economic indicators, suggested a gradual improvement in the labour market.
“Importantly, these developments appear to jar with the surprise jump in July’s unemployment rate to 6.4 per cent and suggest recent labour market conditions are steadily improving,” he said on Monday.
The next set of data on employment is due to be released on Thursday.
Hogan expects the unemployment rate will remain above six per cent for several months before gradually falling.
“On the one hand, strengthening labour demand in some labour intensive industries, such as in construction, health and retail, is an encouraging sign,” he said.
“However, the effect on employment from the wind back in mining investment is likely to have further to run, which will be a hindrance to a strong improvement in the unemployment rate over the next year or so.”
CommSec chief economist Craig James expects it will take five to six months for the August rise in job ads to translate into new staff being added to company payrolls.
As a result, retailers should benefit if there is an uptick in employment.
“The lift in hiring intentions provides confidence to those in jobs. And the lift in job numbers will support higher spending,” James said.
In other data released today, consumer confidence has lifted – helped by continued low interest rates and rising housing prices.
The ANZ/Roy Morgan weekly consumer confidence index rose 0.6 per cent in the first week of September.
The index has stabilised around its long run average over the past four weeks after a sharp decline around the time of the federal budget in May.
ANZ chief economist Warren Hogan said rising confidence that households have in their family finances is showing continued momentum.
“The recent stabilisation in confidence is a positive sign and ANZ’s base case remains that consumer spending will grow moderately this year, before improving next year,” he said.
“The labour market will be important for the outlook, so it is encouraging that the August ANZ job ads report yesterday showed that labour demand is gradually strengthening.”
