By Chris Zappone
A forward-looking gauge of jobs posted a modest gain in June, following a steep drop in May, undermining the case for interest rate rises this year.
ANZ Job Advertisements rose 3.7 per cent in June, about half the 6.5 per cent drop in May, their biggest monthly fall in more than two years.
Newspaper advertisements fell 4.9 per cent in June to 8345, bringing them 11 per cent lower than a year ago, while online ads rose 4.2 per cent to 180,167 ads, or 11 per cent over the year.
"The trend for job advertising shows a very slight decline from a much lower level than the peak recorded just prior to the GFC in mid 2008," said ANZ Head of Australian Economics and Property Research Ivan Colhoun.
Total trend job ads peaked above 250,000 a week in mid-2008 before falling as low as 129,000 in August of 2009. On a trend basis, they fell to 188,600 in June, down 0.8 per cent from 190,000 in May.
"Declining trends in job advertising historically have not been consistent with rising interest rates - and in fact usually foreshadow lower interest rates."
‘‘This disappointing result suggests the drop in advertising in May is reflective of weaker economic conditions in the non-mining sectors of the economy,’’ said Mr Colhoun.
‘‘Anecdotal evidence from ANZ’s business customers is beginning to indicate more limited hiring intentions due to mixed economic conditions.’’
‘‘ANZ now expects the RBA to leave interest rates unchanged for the remainder of 2011, with the next increase not expected before February 2012,’’ said Mr Colhoun.
The Reserve Bank Board meets to decide on the interest rate setting tomorrow with a consensus of analysts tipping no change to the 4.75 per cent interest rate level, where it has been since November.
The Australian economy, aided by strong demand for resources from Asia, has expanded through the time of the financial crisis, adding jobs. In the three months to March, the economy posted its first quarter of contraction since 2008, because of the floods in Queensland at the beginning of the year.
Although the official unemployment rate has remained at 4.9 per cent in recent months, signs have emerged that the momentum behind Australia’s jobs growth is beginning to flag. In May, new full-time positions dropped by 22,000, according to official figures, while the unemployment rate remained at 4.9 per cent.
Economists expect that 15,000 jobs overall will have been created in June, when the data is released by the Australian Bureau of Statistics on Thursday.
czappone@fairfax.com.au