Fewer job ads point to RBA cut
SLOWING employment growth will pave the way for the Reserve Bank to cut interest rates later this year, ANZ's head of Australian economics Ivan Colhoun has predicted.
The number of job advertisements published in newspapers and online during July fell 0.8%, ANZ's monthly survey revealed on Monday.
It was the fourth consecutive monthly fall in job ads and follows a 1.1% drop in June. Advertisements are now down 9.1% year-on-year.
Mr Colhoun said while he expected the RBA to leave the cash rate on hold at 3.5% when its meets on Tuesday, employment data would have a strong bearing on monetary policy over the coming months.
"While the Bank is clearly happy to assess for the next few months the impact of recent interest rate reductions on the economy, we expect that later in the year, slower than desirable employment growth will allow modest further interest rate reductions," Mr Colhoun said.
Mr Colhoun predicted Australian Bureau of Statistics figures, to be released on Thursday, will show 10,000 net new jobs were created in July.
He also forecast a slight increase in the unemployment rate to 5.3%.
"The slight declining trend for job advertising in recent months together with a pick up in job losses due to restructuring and businesses' productivity initiatives is likely to be consistent with a slight further rise in the unemployment rate," he said.
Job advertisements in newspapers fell 3.2% in July, with more than half of the fall coming in the Northern Territory, which tends to have high monthly volatility.
The number of internet job ads fell 0.7%, after falling 1% in June. Internet job advertisements were 8.6% below the same time last year and have fallen for four consecutive months.