The latest ANZ job ads survey confirmed the labour market is sluggish.
And why wouldn’t it?
The economy is sluggish.
Economic growth over the past year (to June) was a measly 1.4 per cent.
Even the US managed 1.6 per cent, making it the second year in a row the world’s biggest basket case has outperformed Australia in the gross domestic product (GDP) race.
But the comparison can be stretched a bit too far.
The number of people with jobs grew by just 0.5 per cent in the US over the latest 12 months, compared with 1.2 per cent in Australia.
The difference might appear small in percentage terms, but in a country the size of Australia, it represents about 80,000 more people in work.
And the difference is a reminder that, despite similar GDP growth rates, Australia is not doing quite as badly as the GDP figures suggest.
GDP is typically the main driver of jobs growth but the headline GDP growth figure is misleading in this case.
That’s because GDP accounted for by the flood-affected mining sector slumped by nine per cent over the past year, but employment in that sector still surged by 14 per cent.
Some basic arithmetic shows GDP growth outside the mining sector was closer to 2.4 per cent than 1.4 per cent in the latest year.
Even so, that’s still about one percentage point below the long-run average for GDP growth, meaning annual employment growth should also be about one percentage point below the long-run average, which – not coincidentally – it is.
The ANZ’s figures released on Monday just add more evidence to support that.
The total number of job ads fell by 2.1 per cent, seasonally adjusted, in September, the fifth fall in six months.
The trend series, a smoothed version of the adjusted figures, is now six months into decline.
It doesn’t mean the labour market is collapsing, just that it’s sluggish.
The number of people with jobs is not growing, according to the official labour force figures for August.
The experience of the past half-year is that employment has grown too slowly to offset growth in the working-age population, resulting in unemployment rising to 5.3 per cent in August, from a low of 4.9 per cent in March and April.
The Australian Bureau of Statistics (ABS) will give us an update on that when it releases the September data on Thursday, but there is no reason to expect the picture to change much in the coming few months.
That’s bad news for job-seekers, but good news of a sort for home buyers.
It means the Reserve Bank of Australia (RBA) might have some scope to lower interest rates, possibly even in time for the New Year, and might not even need a new global financial catastrophe to convince it to make the move.
