Job ads rise in June confirming a tight labour market

  • By Zilla Efrat

The labour market remains tight with ANZ Job Ads rising 1.4 per cent in June, surpassing their peak in March.

ANZ senior economist, Catherine Birch, says the June rise followed a jump in employment of 60,600 in May.

“Growth in demand for labour is still outpacing supply,” she says. “Australian Bureau of Statistics job vacancies rose 13.8 per cent quarter-on-quarter to a record high 480,100 in May, a much sharper increase than ANZ Job Ads over the same period.”

ABS job vacancies are defined as jobs “available for immediate filling... for which recruitment action has been taken”. Recruitment action includes measures other than advertising alone.

“One reason for the larger divergence between ANZ Job Ads and ABS job vacancies recently may be an increased propensity for employers to use channels other than paid advertising to recruit, especially if they expect a reduced rate of success,” says Birch.

“In any case, the key takeaway for us is that the sheer volume of unmet labour demand suggests underutilisation will keep falling and stay low even as demand growth is curtailed by higher inflation and rising interest rates.

“The very tight labour market is a key reason why we expect the Australian economy will be resilient in the face of these factors.”

Birch says the strength in the labour market was a key reason why the Fair Work Commission increased the minimum wage by 5.2 per cent and award wages by at least 4.6 per cent.

Also contributing to the decision was the increased cost of living and its disproportionate effect on lower-paid workers as well as the effects on business costs and inflation.

These increases will contribute to broader wage growth acceleration in the second half of 2022, says Birch.