Summary: Job ads slip 0.1% in September; 8.3% lower than September 2022; ANZ: up 2.3% over last 3 months; long-term ACGB yields up moderately; rate-rise expectations soften slightly; ANZ: labour market is loosening; ad index-to-workforce ratio steady at 0.99.
From mid-2017 onwards, year-on-year growth rates in the total number of Australian job advertisements consistently exceeded 10%. That was until mid-2018 when the annual growth rate fell back markedly. 2019 was notable for its reduced employment advertising and this trend continued into the first quarter of 2020. Advertising plunged in April and May of 2020 as pandemic restrictions took effect but then recovered quite quickly to historically-high levels.
According to the latest ANZ-Indeed figures, total advertisements slipped 0.1% in September on a seasonally adjusted basis. The result followed gains of 1.7% and 0.7% in August and July respectively. On a 12-month basis, total job advertisements were 8.3% lower than in September 2022, down from August’s revised figure of -8.0%.
“The series has demonstrated remarkable staying power recently and has lifted 2.2% over the last three months,” said ANZ economist Madeline Dunk.
Long-term Commonwealth Government bond yields rose moderately on the day, somewhat lagging overnight movements of US Treasury yields. By the close of business, the 3-year ACGB yield had crept up 1bp to 4.10% while 10-year and 20-year yields both finished 5bps higher at 4.56% and 4.87% respectively.
In the cash futures market, expectations regarding further rate rises softened slightly. At the end of the day, contracts implied the cash rate would increase from the current rate of 4.07% and average 4.125% through November, 4.195% in December and 4.275% in February. May 2024 contracts implied a 4.31% average cash rate while August 2024 contracts implied 4.30%, 23bps more than the current rate.
“The Australian labour market is loosening,” Dunk added. “While things are still tight, the underemployment rate has been creeping upwards, the unemployment rate has risen to 3.7% and hours worked fell in August. This continued cooling of the labour market should help temper any future gains in Job Ads.”
The inverse relationship between job advertisements and the unemployment rate has been quite strong (see below chart), although ANZ themselves called the relationship between the two series into question in early 2019. A higher job advertisement index as a proportion of the labour force is suggestive of lower unemployment rates in the near future while a lower ratio suggests higher unemployment rates will follow. September’s ad index-to-workforce ratio remained steady at 0.99 after revisions.
In 2008/2009, advertisements plummeted and Australia’s unemployment rate jumped from 4% to nearly 6% over a period of 15 months. When a more dramatic fall in advertisements took place in April 2020, the unemployment rate responded much more quickly.