Summary: ANZ’s job ads index dives in April; five times worse than previous record fall; a bad sign for employment in coming months.
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 were already troubling before Australian labour demand stepped over March’s cliff edge.
According to the latest ANZ figures, total advertisements plunged by 53.1% in April on a seasonally-adjusted basis. The staggering drop followed a 10% fall in March and a 1.5% rise in February after revisions. On a 12-month basis, total job advertisements were 62.2% lower than in April of last year, representing a massive drop from March’s comparable figure of -18.3%.
ANZ senior economist Catherine Birch said the drop “was almost five times the previous record monthly fall of 11.3% in January 2009, which was during the GFC.”
The figures came out on the same day as the Melbourne Institute’s April Inflation Gauge index and March’s dwelling approval numbers. Commonwealth bond yields moved lower, although they finished largely in line with US Treasury movements. By the end of the day, the 3-year ACGB yield had slipped 1bp to 0.24%, the 10-year yield had lost 3bps to 0.83% while the 20-year yield finished 4bps lower at 1.46%.
In the cash futures market, expectations of a rate cut softened a touch. By the end of the day, May contracts implied a rate cut down to zero as a 60% chance, down from the previous day’s 62%. June contracts implied a 56% chance of such a move in that month, down from 58%. Contract prices of months in the remainder of 2020 and through to mid-2021 implied similar probabilities, ranging between 45% and 65%.