Australian Job Ads Decline for Third Straight Month, ANZ Says
Australian job notices declined for a third straight month in June as Europe’s fiscal crisis discouraged companies from hiring, a private report showed.
Jobs advertised in newspapers and on the Internet dropped 1.2 percent from May, when they fell a revised 2.6 percent, according to an Australia & New Zealand Banking Group Ltd. (ANZ) report released in Melbourne today.
Reserve Bank of Australia Governor Glenn Stevens kept the benchmark interest rate unchanged at 3.5 percent this month after lowering borrowing costs by a total of 75 basis points in May and June. Data in the past week showed retail sales advanced more than economists forecast in May, home building permits jumped by a record and the trade deficit was narrower than expected, signaling a stronger economy.
“Recent communication from the RBA suggests that the official cash rate will remain unchanged for some time, while the bank gauges the effect of prior monetary easing on the economy,” Justin Fabo, senior economist at ANZ Bank, said in the statement. “Job advertisements have historically been a good leading indicator of changes in the official cash rate.”
Traders are pricing in a 71 percent chance of a quarter percentage point cut to 3.25 percent at the central bank’s next meeting on Aug. 7, Bloomberg data based on swaps trading show.
National vacancies advertised in newspapers dropped 3.3 percent in June, and Internet notices fell 1.1 percent, today’s report showed.
“There has been a mild softening in labor demand in Australia after it had strengthened somewhat in the early part of the year,” Fabo said. “In part, this likely reflects hesitation among some firms to hire additional staff in the face of heightened uncertainty about the global economy again in recent months, particularly in Europe.”
Australia’s unemployment rate likely rose to 5.2 percent in June from 5.1 percent a month earlier, according to the median of 25 estimates in a Bloomberg News survey before a government report scheduled to be released July 12.
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