A further rise in job ads bodes well for the Reserve Bank’s expectation of above-average employment growth continuing.
Ahead of Thursday’s official monthly employment figures, a new report showed job ads posted on the internet grew for a 16th consecutive month in trend terms, the longest continuous run in seven years.
The Department of Jobs and Small Business said on Wednesday job ads rose 0.6 per cent in February to be 10.5 per cent higher over the year.
They now stand more than 31 per cent higher than the most recent low point in October 2013.
“The Aussie jobs bonanza is set to continue,” Commonwealth Securities economist Ryan Felsman said.
Victoria and the ACT led the way during the month, both scoring job ads growth of 0.8 per cent, followed by NSW and Western Australia which increased by 0.6 per cent.
Queensland ads were flat, while South Australia, Tasmania and the Northern Territory all recorded small falls.
Job ads rose in five-of-the-eight occupational groups monitored by the department.
Economists’ forecasts for the labour force figures centre on a 20,000 increase in the number of people employed, keeping the jobless rate at 5.5 per cent and close to its lowest level in five years.
In January, 16,000 jobs were created, marking a record 16 consecutive months of employment growth.
However, there is some uncertainty over what rate of economic growth the Reserve Bank is now expecting for this year, which may delay an eventual rise in the cash rate.
Having forecast a growth rate of 3.25 per cent rate, the minutes of the central bank’s March 6 board meeting released on Tuesday said GDP growth is “expected to exceed potential growth”.
It has previously cited potential growth as 2.75 per cent.
This was the third variation of its assessment for growth this year, previously stating it would be “a little above three per cent”, then “faster than 2017”.
Westpac chief economist Bill Evans said this issue won’t be settled until the Reserve Bank’s next quarterly monetary policy statement on May 4 which includes updated forecasts.
“When the bank was confidently predicting 3.25 per cent growth for 2018 it seemed likely that it expected to be raising rates in 2018,” Mr Evans said.
“The signals in the latest minutes indicate that it may indeed be reassessing that expectation.”
However, the Westpac-Melbourne Institute leading index for February also released on Wednesday, which indicates the likely pace of economic activity in the three-to-nine months’ time, pointed to improving prospects in the first half of this year after a disappointing 2.4 per cent rate in 2017.