Job advertisements in Australia rose sharply in May, prompting analysts to suggest that labour market hiring may spike in the second half of the year.

According to the ANZ, the number of job postings increased by 2.4 per cent to 157,942 in seasonally adjusted terms, leaving the increase on a year earlier at 9.1 per cent.

The monthly increase was the largest in percentage terms since September 2015.

Internet-based postings jumped by 2.6 per cent to 155,840, up 9.9 per cent on the levels of May 2015.

Partially offsetting that increase, newspaper advertisements tumbled by 12.6 per cent to just 2,102. They have now fallen by 31.1 per cent over the past 12 months, underlining the shift in preference to online rather than print advertising from employers.

Head of Australian economics at ANZ Felicity Emmett described the result as “encouraging”.

“After six months of broadly flat job ads, the strong rise in ads in May is encouraging. Despite some ongoing headwinds, the economy is tracking along quite well and the transition to non-mining activity is occurring,” she said.

“The rise in job ads is consistent with the strength in business conditions, which point to ongoing solid growth in the economy.

“Last week’s strong Q1 GDP report shows that the non-mining economy is gaining traction, with housing and the services sector key drivers of this strength.

“These sectors are also clearly helping to support jobs growth,” Ms Emmett said.

Although she believes the increase in advertisements is a good sign for labour market conditions in the second half of the year, Ms Emmett said the lack of inflationary pressures within the economy currently, including on rising wages, has allowed jobs growth to remain strong despite weaker levels of economic growth.

“Despite the recovery in activity, wages growth remains low,” she said.

“Ongoing weak wage growth has helped to support solid employment gains over the past year or so and is likely to continue to do so.

“But very low growth in labour costs is feeding through to very low inflation. With inflation set to stay outside the RBA’s target band until at least mid-2017, we expect to see another cut in the cash rate in August to a low of 1.5 per cent,” Ms Emmett said.

The Australian Bureau of Statistics will release Australia’s official jobs report for May on June 16.

In April, Australian employment increased by 10,800, leaving the unemployment rate at 5.7 per cent, the lowest level since September 2013.

Sarah Gilmour
AMES Australia Staff Writer