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Job advertisements fall to lowest level in more than two years

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A two year low in job advertisements data shows Australia’s labour force is still under strain, and could prompt the central bank to cut rates at its Tuesday meeting.

The monthly ANZ Job Ads survey, released on Monday, showed the number of job advertisements falling 4.6 per cent in October, after a drop of 3.9 per cent in September.

Job advertisements have been in decline for seven straight months, with the total number of adverts now at its lowest point since January 2010.

Internet advertising fell by 4.6 per cent in October, down 14.4 per cent year-on-year.

Newspaper advertising is in a stronger decline, falling 4.1 per cent in the month, for a fall of 26.9 per cent from the previous year.

All states (and the ACT) reported falls in newspaper advertising in October, with particular weakness in Victoria, WA and the ACT.

ANZ head of Australian economics and property research Ivan Colhoun said weaknesses in job advertising, together with a rise in last month’s unemployment rate, could prompt the central bank to cut the cash rate at its meeting on Tuesday.

“While we pushed back our previous expectation of the next rate cut to December after the higher-than expected third quarter CPI (consumer price index), a move on Melbourne Cup Day would not surprise,” he said.

With a high Australian dollar putting pressure on a number of weak sectors in the economy, further rate cuts could provide some relief, he added.

The Reserve Bank of Australia (RBA) is due to decide its cash rate position on Tuesday, with economists predicting it will cut by a quarter of a percentage point, bringing the rate to 3.0 per cent, following an earlier cut by the same amount in October.

HSBC chief economist Paul Bloxham said that with official labour force data coming out on Thursday, after the RBA meeting, the bank could take the job advertisements data as a sign that the unemployment rate was moving higher.

“The labour market looks like it’s weakening, and they’re not going to know whether unemployment will go up even further at the end of this week,” he said.