• Australian online job advertisements continued to fall in April, although the pace was substantially slower than in prior months.
• Online job ads, as measured by ANZ’s jobs index, have fallen 5.6%, an outcome that points to slower employment growth and an unchanged unemployment rate.
• Should unemployment and underemployment fail to fall any further in the period ahead, it suggests Australian wage and inflationary pressures will remain weak.
• ANZ expects the RBA will cut Australia’s cash rate by 25 basis points on Tuesday. It’s remained at 1.5% since August 2016.

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Australian online job advertisements continued to fall in April, although the pace was substantially slower than in prior months.

According to ANZ Bank’s Australian Job Advertisements series, total online postings fell 0.1% to 166,464 last month after adjusting for seasonal patterns, extending the slide seen in the prior five months.

Despite the persistent weakness, it was the smallest percentage fall since October last year, and saw the annual rate of decline slow to 5.6% from 6.2% in March.

“After five successive steep falls, it is pleasing to see a virtually unchanged result in job ads for April,” said David Plank, Head of Australian Economics at ANZ.

While an improvement from the 1.7% drop recorded in March, Plank cautioned not too read too much into the moderation, at least at this point.

“We aren’t getting too carried away with the result, since we saw last year that a positive result for October was followed by renewed weakness,” he said.

Adding to the need for caution, Plank said the current pullback in advertisements still points to moderation in employment growth in the months ahead, and potentially stability in Australia’s unemployment rate, after having trended lower for several years.

“Job ads have continued to lead the direction of employment growth reasonably well,” he said.

Job ads suggest employment growth will slow but remain positive. Slower jobs growth will not be enough to reduce the unemployment rate further, however.”

If correct, Plank said soft wages growth will likely persist in the period ahead, and do little to lift Australian inflationary pressures, adding to the need for the RBA to cut official interest rates.

“This makes it unlikely that wage growth will accelerate by enough for the RBA to be confident of meeting its inflation target,” he said.

“The labour market needs to get stronger, which is why we think the RBA will ease policy on Tuesday.”

The RBA will announce its May interest rate decision on Tuesday, with a 25 basis point rate cut deemed to be close to an even money bet based on current market pricing.

If the RBA does decide to cut Australia’s cash rate, it will be the first time policy settings have been adjusted since August 2016.

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