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Job ads rise but rate of growth continues to slow

JOB vacancies rose by 1.4 per cent over the three months to February, which is a substantial rate of growth although far lower than that recorded a year ago.

The consensus expectation from economists was for a smaller increase in the reading, which is the Reserve Bank of Australia’s preferred measure of labour demand.

Employers in February advertised a record 245,300 positions, according to seasonally adjusted data released yesterday by the Australian Bureau of Statistics.

Private sector growth of 1.8 per cent offset a 1.7 per cent decline in the public sector, although the overall rate of growth was marginally lower than the 1.5 per cent in the November quarter – and far below the 5.2 per cent recorded a year ago.

“Growth in the quarterly trend measure of job vacancies eased further,” said Bruce Hockman, chief economist at the ABS.

“This was consistent with the recent slowing in other economic indicators.”

NAB economist Kaixin Owyong said: “These data support the RBA’s view that the labour market will continue to improve, and provide an offset to the drag from reduced housing activity.

“That said, in trend terms, vacancies growth has been slowing for just over a year now.”

Job vacancies growth has slowed in trend terms for five consecutive quarters. That deceleration was also reflected in vacancy growth over the year, which slowed to less than half the 20.4 per cent pace seen in the 12 months to February last year.

Broken down by regions, the ABS reported that vacancies in New South Wales, Victoria and Western Australia all increased in the quarter, lifting by 1.7 per cent, 2.3 per cent and 2.4 per cent, respectively, in original terms. This disguised falls in all other locations.

The growth confirmed yesterday wasn’t sufficient to change Ms Owyong’s belief that the RBA (pictured) will cut the cash rate twice by November to a new all-time low of 1.0 per cent.

Last month’s disappointing GDP data hardened many economists’ belief that cuts are on the way.

“We still believe the RBA is too optimistic on the economic outlook given the slowdown in growth,” Ms Owyong said.

There were 224,100 private sector jobs advertised in February, and 21,200 in the public sector.

The Australian dollar was largely unmoved by the data against its US counterpart.