Two key sets of data squared up against each other on Monday but it was the economy that came out ahead on points.
The ANZ’s count of jobs ads rose to a 13-month high in April, while the value of building approvals dropped to an eight-month low in March.
The ANZ’s jobs series does not measure job losses, only advertising for newly vacant positions, so is only an indirect gauge of total job creation.
Even so, the recent trend does appear to be upward.
The ANZ’s trend series, which smooths out the seasonally adjusted data, bottomed out in October/November last year and has since crept upward.
ANZ’s chief economist, Ivan Colhoun, says that going by its historical relationship with the ANZ’s job ads measure, the official unemployment rate may peak around six per cent.
“The prospect of a larger-than-expected fiscal contraction, however, poses some risks to this outlook,” he said in a commentary on the data.
Employment looks like improving only “modestly” in the months ahead, Mr Colhoun said.
Also sounding a cautionary note on Monday was the news that building approvals had fallen in March.
The Australian Bureau of Statistics said the value of residential approvals dropped by three per cent, but the value of approvals for non-residential buildings like shops, offices and hotels slumped by 23 per cent.
Both non-residential buildings and the multi-unit housing developments responsible for the drop in residential approvals are very volatile from month to month, so not too much should be made of the latest fall.
Cutting through the volatility, the average monthly value of total approvals in the March quarter was still up by $1.8 billion from the previous March quarter.
Still, the fall in approvals in March did happen, meaning there’s now less work in the pipeline to support economic growth through this year than if the higher level had been sustained.
If a lower level of approvals were to be sustained it would put a cloud over the economy’s immediate outlook, especially with the federal budget to be tightened and the mining investment boom to run down.
But, so far, so good.