Surging job ads point to unemployment drop

Businesses still seem keen to take on workers, despite the uncertainty caused by the end of the JobKeeper wage subsidies.

Job advertisements rose by a further 7.4 per cent in March, building on an upwardly revised 8.8 per cent increase the previous month.

Job ads are now at their highest level since November 2008 and point to further sharp declines in the unemployment rate.

Treasury estimates up to 150,000 people will lose their job as a result of JobKeeper winding up.

“We think net employment losses will be smaller, as growing labour demand elsewhere should mean many workers find a new job relatively quickly,” ANZ senior senior economist Catherine Birch said on Tuesday.

Ms Birch expects a temporary rise in the jobless rate over the next few months, before it resumes a rapid downward trajectory in the second half of the year.

Economists will be seeking the thoughts of the Reserve Bank on the jobs market following its monthly board meeting, as well as its views on the country’s heated housing market.

Otherwise, economists expect central bank governor Philip Lowe to stay on message at the monthly gathering – that is, interest rates are likely to remain at record lows until 2024.

The central bank will continue to pursue lower unemployment, higher wage growth and more normal inflation pressures through a mixture of a cash rate at just 0.1 per cent and a hefty bond-buying program.

House prices have grown at their fastest pace in 32 years, while home lending and building approvals are at, or close to, record highs.

CoreLogic research director Tim Lawless notes the last time Sydney prices were growing at their current pace was in mid-2015.

At the time, Australian regulators felt compelled to slow the pace of investor demand by putting limits on lending.

This time around, it appears to be first-home buyers that are holding court with demand for mortgages 65.8 per cent higher than a year earlier, buoyed by low lending rates.

At this stage, Australia’s Council of Financial Regulators – the RBA, Treasury, the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission – appear relaxed.

The regulators have made it clear it is not their job to regulate house prices, but they will step in if lending standards show signs of slipping.

The RBA will also release its twice-yearly financial stability review later this week, which may garner more interest than usual in regard to the housing sector.

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