September job ads slide; Vic jobs “likely to fall”

Summary:  Job ads down 2.8% in September; 60.8% higher than same month in 2020; employment “likely to fall heavily in Victoria in September”; ads-to-workforce ratio slightly lower.

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. Advertising plunged in April and May of 2020 as pandemic restrictions took effect but then recovered quite quickly.

According to the latest ANZ figures, total advertisements decreased by 2.8% in September on a seasonally-adjusted basis. The fall followed declines of 2.7% and 1.5% in August and July respectively after revisions. On a 12-month basis, total job advertisements were 60.8% higher than in September 2020, down from August’s comparable figure of 80.1%.

“So far, employment losses have been concentrated in New South Wales but employment is likely to fall heavily in Victoria in September. Again, the youngest workers and those in the lowest-earning occupations are being hit hardest,” said ANZ senior economist Catherine Birch.

Longer-term Commonwealth Government bond yields rose on the day, largely in line with movements of their US Treasury counterparts. By the close of business, the 10-year ACGB yield had added 2bps to 1.54% and the 20-year yield had gained 3bps to 2.17%. The 2-year yield finished unchanged at 0.51%.

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.

In 2008/2009, advertisements plummeted and Australia’s unemployment rate jumped from 4% to nearly 6% over a period of 15 months. When a more dramatic fall in advertisements took place in April 2020, the unemployment rate responded much more quickly.

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