MNI DATA ANALYSIS: Australia Job Ads Up But Trend Declines

By Sophia Rodrigues

     SYDNEY (MNI) - Job advertisements in Australia rose in July, almost

entirely recovering from the fall in June but trend dropped into negative for

the first time in four years, raising some warning signs about the outlook for

the labor market.

     Data published by ANZ Monday showed job ads rose 1.5% m/m in July,

following a 1.7% fall in June. In y/y terms, the pace improved to 7.3% in July

compared with 6.9% in June.

     In trend terms, however, job ads fell 0.2% m/m in July to mark the first

fall since August 2014. The +7.0% y/y trend growth was the slowest since

December 2016.

     ANZ's head of Australian economics David Plank said the softening in

monthly trend contrasts with other labor market indicators such as business

conditions, capacity utilization and profitability, but he will be watching the

job ads closely for any further weakness.

     "We will be closely watching the Job ads ... as further weakness in the

series may challenge our view. This in turn would have implications for wage

growth, consumption and the return of inflation to the target band," Plank said.

     The outlook for the labor market is extremely important for the Reserve

Bank of Australia's monetary policy because Governor Philip Lowe has indicated

that as long as the labor market is improving, he wouldn't worry too much about

low inflation.

     In the quarterly Statement on Monetary Policy due Friday, the RBA is likely

to stick to an upbeat view on the labor market based on several indicators,

including an increased emphasis on job vacancies which recently rose to an

historical high.

     From the ANZ job advertisement survey for July:

                              July                 June

-------------------------------------------------------

Job Ads (SA*, Change M/M)     +1.5  -1.7% (no revision)

Job Ads (SA*, Change Y/Y)    +7.3%                +6.9%

Job Ads (Trend, Change M/M)  -0.2%  +0.1% (no revision)

Job Ads (Trend, Change Y/Y)  +7.0%                +8.2%

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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