Summary: Job ads up 3.0% in June; ads 129.1% higher than same month in 2020; “more improvement to come”; recent lockdowns to “limit” jobs market improvements in June, July; workers typically reinstated once restrictions lift.
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 and May of 2020 as pandemic restrictions took effect but then recovered relatively quickly.
According to the latest ANZ figures, total advertisements increased by 3.0% in June on a seasonally-adjusted basis. The rise followed a 6.8% increase in May and a 4.7% gain in April after revisions. On a 12-month basis, total job advertisements were 129.1% higher than in June 2020, down from May’s comparable figure of 246.5%.
“The 3.0% rise in ANZ Job Ads in June suggests there is more improvement to come in the near term, despite lockdowns,” said ANZ senior economist Catherine Birch.
The figures were released on the same day as the Melbourne Institute’s latest reading of its Inflation Gauge and Commonwealth Government bond yields fell on the day. By the close of business, the 3-year ACGB yield had slipped 1bp to 0.42%, the 10-year yield had shed 5bps to 1.44% while the 20-year yield finished 1bps lower at 2.04%.
Birch expects recent lockdowns in various states to “limit further labour market improvements in June and July” but only temporarily “as long as restrictions ease as planned and states avoid extended lockdowns.” She said history suggests “workers are reinstated once restrictions lift, given the underlying strength in the labour market and overall demand.”
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.