Summary: Job ads stabilises in May; numbers improved steadily over month; more job losses expected in next Labour Force report; rebound “likely from midyear”.
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, along with a reversal of the gains in 2017 and 2018. Figures from the first quarter of 2020 continued the trend and then April’s numbers set a record of the worst type.
According to the latest ANZ figures, total advertisements increased by 0.5% in May on a seasonally-adjusted basis. The small gain followed a 53.4% plunge in April and a 10.2% fall in March after revisions. On a 12-month basis, total job advertisements were 59.8% lower than in May of last year, representing a modest improvement from April’s comparable figure of -62.3%.
The ANZ report came out on the same day as NAB’s May Business Survey and Commonwealth bond yields moved lower, although they may have only followed US Treasury movements to some degree. By the end of the day, the 3-year ACGB yield had slipped 1bp to 0.28%, the 10-year yield had lost 7bps to 1.09% while the 20-year yield finished 4bps lower at 1.69%.
In the cash futures market, expectations of a rate cut barely changed. By the end of the day, July contracts implied a rate cut down to zero as a 54% chance, unchanged from the previous day. August contracts implied a 46% chance of such a move in that month, also unchanged. Contract prices of months in the remainder of 2020 and through to late-2021 implied similar probabilities, ranging between 33% and 47%.