Australian Job Vacancies Dip as Labour Market Eases, Impacts Interest Rates

Summary

  • Job vacancies in Australia have slightly decreased by 0.7% from the previous quarter, following a significant drop of 8.2%.
  • Despite a decline of 14.4% compared to the previous year, the count of 388,800 job openings is still considerably higher than pre-pandemic levels.
  • Private sector vacancies saw a minor decline of 0.6% while the public sector noticed a 1.8% falloff.
  • The ratio of jobless individuals per vacancy, jobless rate, and its implications on interest rates and wage growth are also discussed
  • Changes in the labour market due to an influx of skilled migrants and foreign students are also mentioned.

Job Vacancy Trends

Job openings in Australia witnessed a marginal 0.7% decrease from the preceding three months, following a notable 8.2% plunge, according to a Wednesday report from the Australian Bureau of Statistics (ABS). Despite the decline, the readings, at a seasonally adjusted 388,800, mark a staggering 70% increase compared to figures noted prior to the pandemic.

Private and Public Sector Vacancies

Job vacancies within the private sector showed a slight reduction of 0.6%, and the public sector experienced a 1.8% decrease. The percentage of businesses reporting at least one vacancy also reduced to 19.7% from a previous year’s peak of 27.7%.

Unemployment Figures and Labour Demand

David Taylor, ABS’s Head of Labour Statistics, observed that the count of unemployed people per job opening stood at 1.5 in November. This figure is higher than the pandemic low of 1.1 but is considerably lower than the 3.1 figure reported in February 2020. A flux of skilled migrants and foreign students fulfilling the high demand for labour has been a significant factor contributing to these statistics.

Impact on Economic Indicators

With employment increasing by a reasonable 35,600, the jobless rate rose slightly, reaching an 18-month peak (3.9%) in November. This minor easing in the labour market has curtailed wage growth and reduced pressure for further interest rate hikes from the Reserve Bank of Australia (RBA), with the rates already being raised by 425 basis points, leading to a 12-year high of 4.35%.

These changing labour market dynamics, combined with the RBA’s monetary policy adjustments, could influence Australia’s financial markets, including forex trading and sensitive Australian assets.

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