By Chris Zappone
The number of job advertisements rose for the first time since April 2008, the latest sign that the Australian economy is emerging from its shallow downturn - but adding to the prospect that interest rates will soon rise.
The total number of jobs advertised increased 4.1 per cent in August to an average of 130,326 a week, according to the ANZ Bank's monthly survey.
''It's actually a reasonably optimistic picture in our sector at the moment,'' said Sydney-based IT sales and executive recruiter Michael McGrath of Tonic Executive Search. ''Certainly the conditions are a lot better.''
Newspaper ads increased 5.5 per cent in August, while internet ads grew by 4 per cent, ANZ said.
''These data provide the best evidence we have received to date that the labour market - and the economy more generally - are about to enter the recovery phase of this downturn,'' said ANZ acting chief economist Warren Hogan in a statement.
The strong forward-looking reading of the jobs market comes after official data released last week showed Australia's economy grew by 0.6 per cent in the second quarter, avoiding the contractions experienced in other advanced economies since the eruption of the financial crisis.
However, a sustained recovery in the Australian economy raises the risk the Reserve Bank might be among the first central banks in the world to raise interest rates.
Before the job ads announcement, the market was rating the chance of a rate rise at the RBA's October board meeting as a 40 per cent chance. One year out, investors are estimating rates will be two full percentage points higher at 5 per cent - equivalent to eight quarter-point increases over the 12 months.
August's 4.1 per cent monthly gain result follows a 1.7 per cent loss in July, as the labour market gathers strength amid a rash of positive signs for the Australia economy.
The monthly ad totals, though, remain far below the level of a year ago, off about 48 per cent last month.
''Looking further ahead, today's numbers confirm our optimism that the pace of decline in employment will not be as severe as envisaged six months ago,'' the ANZ's Mr Warren said.
''Australian economic activity has been remarkably resilient in recent months, particularly in some of our largest employing industries such as retail trade, health services, government and construction.''
IT vendors have had headcount freezes in place for the past six to nine months and many have been lifted only recently, Tonic's Mr McGrath said. ''A number of those clients have strong needs to replace some of the folks they've let go of over the last six to nine months.''
Mr McGrath said his about two-thirds of his clients expected to hire people before the year's end.
The unemployment rate stands at 5.8 per cent, with economists tipping a modest increase to 5.9 per cent for August when the Australian Bureau of Statistics releases the latest figures on Thursday.
Still, the jobless rate has risen much more slowly than analysts and the Government had predicted. ANZ says it now expects unemployment to peak at 7.25 per cent in mid-2010 - down from the 7.5 per cent it flagged previously and well short of the 8.5 per cent estimated in the federal budget released in May.
TD Securities also lowered its end-of-the-year jobless rate expectation from 7.5 per cent to 7 per cent because the ''labour market so far appears more resilient than expected - with a greater focus towards downscaling from full-time to part-time employment so far this year''.
''If expectations for imminent RBA tightening are to be confirmed, we need to see labour market data series continue to improve,'' said TD Securities Annette Beacher in a note to clients.
In a separate release of employment data, the Seek job index declined 0.9 per cent in August, seasonally adjusted, although it marked the second back-to-back month of increases in new job ads.
''While the figures are encouraging, we need to see a few more months of positive growth before we can confidently draw a line in the sand and say we've turned the corner and things are on the rise,'' said Seek Employment managing director Joe Powell.
The Seek index measures both supply and demand in online job postings.
The Olivier Job Index for August, released over the weekend, showed a 2.4 per cent jump, the first notable growth since May 2008, suggesting the job market might be turning the corner towards growth. The index measures job ads on websites.