Summary: Job ads increase modestly in January; 5.3% higher than in January 2020; Victorian reopening sparks acceleration; jobs rebound “could continue into early-2021 at least”.
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 as pandemic restrictions took effect but subsequent reports have provided evidence a recovery is taking place.
According to the latest ANZ figures, total advertisements increased by 2.3% in January on a seasonally-adjusted basis. The rise followed an 8.6% increase in December and a 14.3% gain in November after revisions. On a 12-month basis, total job advertisements were 5.3% higher than in January 2020, up from December’s comparable figure of 4.8%.
“While the pace of growth slowed to 2.3%, we do not think this is cause for concern,” said ANZ senior economist Catherine Birch.
Birch referred to other labour market indicators as “also looking positive”. She said, “Overall, the indicators suggest solid employment gains should continue into [the first half of] 2021”, although she noted the end of the JobKeeper programme in March would place some doubt on further gains “if that support is not replaced by more targeted assistance.”
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.