Summary: Job ads up again in March; near-40% growth over past 12 months; well above pre-COVID level; “growing labour demand” should soften effects of end of JobKeeper.
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. Figures plunged in April 2020 as pandemic restrictions took effect but then recovered relatively quickly.
According to the latest ANZ figures, total advertisements increased by 7.4% in March on a seasonally-adjusted basis. The rise followed an 8.8% increase in February and a 3.0% gain in January after revisions. On a 12-month basis, total job advertisements were 39.7% higher than in March 2020, up from February’s comparable figure of 15.5%.
“Six months ago, our view was that ANZ Job Ads would need to sustain levels materially higher than pre-pandemic in order to entrench the labour market recovery. ANZ Job Ads has done better than that, now 23% above its pre-COVID level and at a 12-year high,” said ANZ senior economist Catherine Birch.
Commonwealth bond yields fell on the day. By the close of business, the 3-year ACGB yield had slipped 1bps to 0.26%, the 10-year yield had lost 4bps to 1.75% and the 20-year yield finished 3bps lower at 2.46%.
Birch thinks the end of the JobKeeper programme will not be quite as detrimental to overall employment numbers “as growing labour demand elsewhere should mean many workers find a new job relatively quickly.”
She expects “a temporary rise” in the June quarter’s unemployment rate before it resumes falling in the second half of the year.
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 rising number of job advertisements as a proportion of the labour force is suggestive of lower unemployment rates in the near-future. A falling ratio suggests higher unemployment rates will follow.