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Labour market improving: ANZ


Labour demand has continued to increase in the early stages of 2014, with job advertisements up 1.4 per cent month-on-month in March, according to the ANZ Job Advertisement Series.

By Michael Masterman 8 minute read

This solid month-on-month performance comes on the back of a sharp increase of 4.7 per cent in February.

Job advertisements are now trending higher by 1.0 per cent month-on-month and are only 3.7 per cent below levels seen a year ago.

ANZ chief economist Ivan Colhoun said there is now sufficient evidence to claim labour demand is now strengthening.

“Each of the main job ads/vacancies measures have risen this year, while some have been improving since the end of last year. Importantly, there has been strength in job advertising in some key industries, including construction, education and health, as well as in the most populous states of NSW and Victoria,” he said.

“This suggests that conditions in the labour market are beginning to improve, despite recent job loss announcements in a number of companies. This suggests the peak in the unemployment rate may be close, although the rate of improvement in job advertising does not suggest a rapid fall in the unemployment rate,” he added.

The trajectory of the pick-up in job advertising will be important for gauging the timing and pace of future interest rate rises, according to Mr Calhoun.

Job advertising has now increased for five consecutive months in trend terms, which is "historically a reliable indicator that the next move in interest rates is up", said Mr Calhoun.

"ANZ continues to expect the cash rate will remain unchanged in 2014 and increase modestly by one percentage point to 3.5 per cent over 2015,” he said.

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