Two gauges of hiring intentions indicate the solid rebound in employment from the depths of recession will extend into the early months of 2021 at the very least.
The reports follow a run of largely positive data over the past week, which suggests the economy will finish the year on a relative high after enduring the first major downturn since the early 1990s.
“We look forward to 2021 knowing the recovery is building in momentum,” Prime Minister Scott Morrison told parliament on Monday.
But this positive outlook didn’t prevent Standard & Poor’s from downgrading the long term credit ratings for the nation’s two largest states, NSW and Victoria – both losing their top-tier AAA status as casualties of the pandemic.
NSW was lowered to AA-plus on the state’s rising debt burden, while Victoria went to AA after being dealt a “severe economic and fiscal shock”.
However, the easing in COVID-19 restrictions, particularly in Victoria, has seen a marked turnaround in job advertising in the past few months.
In its monthly report, ANZ said job ads jumped 13.9 per cent in November after an upwardly-revised 11.9 per cent rise in October., but were still 4.7 per cent lower than February’s pre-pandemic level.
ANZ senior economist Catherine Birch said job ads are on track to match or even exceed pre-COVID levels by year-end.
“This suggests that the rebound in national employment could continue into early 2021 at least,” Ms Birch said on Monday.
But she said there are challenges for the labour market, not least the end of the JobKeeper wage subsidy in March.
However, Westpac economists are more optimistic and now expect the jobless rate to sink to six per cent by the end of 2021 rather than seven per cent as previously forecast, and falling further to 5.2 per cent a year later.
These revisions, and an upgrade to Westpac’s growth forecasts, stem from last week’s stronger than expected national accounts, which confirmed the recession ended in the September quarter.
“Under these forecasts we expect that the level of consumer spending and the level of GDP will return to the ‘end-2019’ levels by the June quarter 2021,” Westpac chief economist Bill Evans said.
Confirming the upswing in job ads, the National Skills Commission in a new preliminary reading of its monthly vacancy report, said job ads on the internet jumped 7.8 per cent in November.
This represents the seventh consecutive monthly rise with job advertisements now 11.2 per cent higher than a year ago.
Over the year, job ads have increased in all jurisdictions except the ACT, but even then the territory posted only 10 fewer ads than 12 months earlier.
Easing restrictions have also given a further boost to the services sector, which is now enjoying conditions not seen for a year.
The Australian Industry Group performance of services index rose a further 1.5 points to 52.9 points in November, another improvement in conditions after a slump for much of the year.
An index reading above 50 points indicates the sector is expanding.
Four of the five sectors covered by the report expanded during November, with only retail and hospitality continuing to contract.
“Sales, new orders, employment and deliveries improved as activity restrictions eased and businesses ran down their inventory levels,” the report released on Monday said.