Summary: Job ads down 0.5% in July; 94.1% higher than same month in 2020; no dramatic effect from lockdowns, restrictions in second half of month; ongoing NSW restrictions to have limited impact in short-term, although “downside risks rise” as lockdown continues; JobSaver labour “hoarding” helping.
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 relatively quickly.
According to the latest ANZ figures, total advertisements declined by 0.5% in July on a seasonally-adjusted basis. The fall followed a 1.5% increase in June and a 6.7% gain in May after revisions. On a 12-month basis, total job advertisements were 94.1% higher than in July 2020, down from June’s comparable figure of 133.6%.
ANZ senior economist Catherine Birch noted advertisements had not dramatically fallen in the second half of the month when New South Wales, Victoria and South Australia implemented “stay at home” or similar restrictions.
The figures were released on the same day as the Melbourne Institute’s latest reading of its Inflation Gauge but Commonwealth Government bond yields remained remarkably stable on the day. By the close of business, 3-year, 10-year and 20-year ACGB yields had all returned to their starting points at 0.28%, 1.18% and 1.81% respectively.
Birch said the figures added to “our expectation that the impact of New South Wales’ lockdown on employment and the unemployment rate will be limited”. She expects the New South Wales Government’s JobSaver programme, in conjunction with the “hoarding” of labour by businesses, “will mitigate state and national effects on employment and unemployment.” However, she also acknowledged “downside risks rise the longer [the] lockdown continues.”
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.
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.