Job advertising has risen sharply as COVID-19 lockdowns ease and now stands at its highest level in 13 years, suggesting a rapid fall in the unemployment rate is on the cards.
The ANZ job ads series released on Monday jumped 7.4 per cent in November to 222,093 vacancies.
Ads have now risen more than 15 per cent in the past two months to stand 44.2 per cent above their pre-pandemic level.
ANZ senior economist Catherine Birch says this reflects the robust economic recovery in NSW, Victoria and the ACT as restrictions eased.
It suggests a drop in the unemployment rate below five per cent again in the coming months after unexpectedly spiking to 5.2 per cent in October.
“We expect it to fall to around four per cent by the end of 2022 and even further in 2023,” Ms Birch said.
“We think competition for labour will get even hotter and workers will exercise their new power by changing to better jobs and asking for higher wages in 2022.”
She believes that will push annual wage growth up to about three per cent in the second half of 2022.
The Reserve Bank of Australia wants to see inflation sustainably within its two to three per cent target before lifting the cash rate from its record low of 0.1 per cent.
To get there it believes unemployment will need to be around four per cent or lower and wage growth at above three per cent compared with 2.2 per cent now.
The RBA will hold its last monthly board meeting of the year on Tuesday.
Inflation has been lifted globally by supply chain disruptions caused by the pandemic and rising fuel costs.
However, Commonwealth Securities senior economist Ryan Felmans said world oil prices are now under pressure on concern rising COVID-19 cases and the emergence of the Omicron variant could reduce global crude demand.
“The fall in international fuel costs is good news for Aussie motorists ahead of summer driving holidays,” he said.
The Australian Institute of Petroleum said the national average unleaded petrol price declined by 2.5 cents last week to 167.9 cents a litre.
It had struck a record high the previous week.
However, pump prices in Sydney and Hobart still hit all-time highs in the past week.