ANZ’s job advertisement survey is well-known as a leading indicator of employment numbers in Australia. It reflects changes in demand for labour and it provides another measure of activity in the economy. There is also a fairly good inverse relationship between changes in Australia’s unemployment rates and changes in the RBA cash rate. Understanding the path of Australia’s unemployment rate has historically provided a reliable indicator of RBA rate changes.
Figures for July have been released and, after revisions, total advertisements in July rose by 4.2% to 177,879 (seasonally adjusted), up from June’s comparable figure of 175,175. On a 12 month basis, job advertisements were 12.2% higher when compared to July 2016 and an increase from June’s comparable figure of 10.3%.
The inverse relationship between job advertisements and the unemployment rate is quite strong (see below chart). An increasing number of job advertisements should be accompanied by lower unemployment rates.