ANZ Australian Job Ads jumped 8.4 per cent m/m in February to a new pandemic high, 1.8 per cent above the post-Delta peak. This supports our view that labour demand will continue to rise and competition for workers intensify.
"ANZ Job Ads rebounded by 8.4 per cent m/m in February as the Omicron wave continued to recede, alleviating disruptions to workers and businesses." ANZ Senior Economist, Catherine Birch said.
"In January's labour force data, during Omicron, hours worked dropped sharply (- 8.8 per cent m/m) including due to sickness, but most employers held onto workers. There was even a modest net employment gain of 12,900."
"The February increase reinforces the view we expressed last month that job ads hadn't yet peaked, with labour demand continuing to grow and job-switching expected to rise. We now forecast the unemployment rate to fall to the low 3s by late 2022 and underemployment to fall further (see Figure 1 on page 3)."
"With Australia's international border reopening, the arrival of skilled migrants, students and backpackers will increase the supply of workers. But we don't think this will prevent further labour market tightening or wage growth acceleration. New arrivals will also add to demand for goods and services (and consequently, demand for labour) in an already strong demand environment. As such, competition for labour is likely to remain elevated."
"Given our upgraded labour market outlook, the shift in bargaining power towards employees and higher inflation expectations, we should see wage growth accelerate convincingly through 2022.The Wage Price Index rose 0.7 per cent q/q in Q4 2021, the strongest quarterly result since 2014, while the national accounts measure of average earnings per hour came in well above the RBA's forecast."
