ANZ Job Ads: small decline in July but no nosedive

ANZ Australian Job Ads1 declined 0.5 per cent m/m in July, the first fall in 14 months, but it is still up 35 per cent on the pre-pandemic level. This reinforces our expectation that the impact of NSW’s lockdown on employment and the unemployment rate will be limited, noting downside risks rise the longer lockdown continues.

“There was only a slight decline in ANZ Job Ads in July, the first full month of NSW’s lockdown.” ANZ Senior Economist, Catherine Birch said.

“Weekly numbers did not fall steeply in the second half of the month either, when NSW tightened restrictions (on construction, retail and more broadly) and Victoria and SA also went into lockdown. There were certainly no signs of a repeat of last year, when ANZ Job Ads dropped 12.9 per cent in March and a further 53.1 per cent in April 2020.”

“This reinforces our expectation that the impact of NSW’s extended lockdown on employment and the unemployment rate will be limited; hours worked and underemployment will again bear the brunt.”

“We think two key factors will mitigate state and national effects on employment and unemployment. First, policy support, including for JobSaver, which requires businesses to maintain their headcount. Second, many businesses are “hoarding” labour to avoid the costs and delays of rehiring once restrictions ease, particularly given reported difficulty finding labour and the record high job vacancy rate.”

“We maintain our positive longer-term labour market outlook and forecast unemployment to fall to 4.5 per cent by Q4 2021 and 4.2 per cent by end-2022. A longer NSW lockdown and outbreaks elsewhere are significant risks though.”

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