Australia’s jobs market improved in October with the ANZ job ad series rising 0.1 per cent for the month, compared with no change in September.
In annualised terms the picture looked better, with job ads rising to 5.2 per cent from 3.8 per cent across the year to September.
“The rise in ANZ job ads is encouraging and points to ongoing improvement in labour market conditions. It is consistent with the moderate pace of economic growth, as well as above average business and consumer sentiment,” said Felicity Emmett, ANZ’s Australian economics research chief.
“Overall, our assessment is that the labour market will continue to improve at a gradual pace and the unemployment rate will continue to edge lower, supported by low interest rates and still elevated business conditions,” she said.
The trend in job ad growth is also higher but has slowed in the last 12 months. Trend annual growth in job advertisements was 4.8 per cent year on year compared to 11.8 per cent a year ago.
Despite the up-trend in job ads there are still not enough jobs to place job seekers, and “this is likely to continue to weigh on wage growth over the medium term,” Ms Emmett said.
“While the unemployment rate has fallen from a recent peak of 6.3 per cent, underutilisation (underemployment) remains high by historical standards, suggesting that there remains a considerable amount of spare capacity in the labour market.”
“While we think that wage growth has stabilised at a low level, the high rate of underutilisation suggests that wages are unlikely to accelerate significantly in the near term,” Ms Emmett said.
Independent economist Stephen Koukoulas said the signs for the Australian economy in recent times have been positive.
“The economy is performing a little better on balance.
“Commodity prices have lifted. It’s not only coal, which has been well publicised, but iron ore is up in the $US60 ($A78) a tonne area whereas earlier in the year it was in the $US40 ($A52) region. Other metals like copper are also stronger,” Mr Koukoulas told The New Daily.
The labour market has been a bit soft with underemployment making itself felt. However, “retail sales have not been strong, but they are not disastrous either”, Mr Koukoulas said.
“Export volumes are good and public spending has been strong with states like NSW and Victoria spending on transport infrastructure.
“We are looking at another 12 months of GDP growth between 2.5 per cent and 3.2 per cent. That’s not bad,” Mr Koukoulas said.
Growth in the ANZ job ad series has been a leading indicator of unemployment rates traditionally.
Rises and falls in unemployment have been presaged by rises and falls in the growth of job ads.