A widely watched private index of job ads is providing early evidence of a labour market turnaround in Australia.
ANZ’s job ads series rose 1.4 per cent in March, seasonally adjusted, backing up a sharp 4.7 per cent rise in February.
While the bank observed that it is difficult to seasonally adjust the early months of the year, the more stable trend number is also positive, up 1 per cent in the month and now only 3.7 per cent below the levels seen a year ago.
Job ads have now been rising in trend terms for five straight months, which ANZ says has historically been a reliable indicator that the next move in interest rates is up.
However, ANZ’s chief economist (Australia) Ivan Colhoun says he does not think the improvement is strong enough yet to prompt a rate rise in the short term.
“The trajectory of the pick-up in job advertising will be important for gauging the timing and pace of future interest rate rises,” he noted in the report.
“ANZ continues to expect the cash rate will remain unchanged in 2014 and increase modestly by 1 percentage point to 3.5 per cent over 2015.”
The ANZ report shows both internet (1.3 per cent) and newspaper (4.5 per cent) job ads rising, with the rise in newspaper ads broadly spread across the states.
Ivan Colhoun says New South Wales, Tasmania, the ACT and the Northern Territory all recorded very strong increases in newspaper job ads, with key industries such as construction, education and health leading the improvement.
“This suggests that conditions in the labour market are beginning to improve, despite recent job loss announcements in a number of companies,” he added.
“This suggests the peak in the unemployment rate may be close, although the rate of improvement in job advertising does not suggest a rapid fall in the unemployment rate.”