Private sector vacancies tumble
The Reserve Bank often refers to the ABS job vacancies data series, and thus it's well worth spending a little bit of time on today's release to see what we can deduce.
Starting at the national level, jobs vacancies have now clearly rolled over, declining by -1.3 per cent over the three months to August 2019 to 236,400.
Historically speaking this is still a high number.
But the -1.8 per cent in decline in private sector vacancies was less promising, especially given that - as pointed out by Felicity Emmett of ANZ - over the year to August almost all of the jobs created on a net basis were in the public sector, which is not sustainable.
Here's the headline data:
But the -1.8 per cent in decline in private sector vacancies was less promising, especially given that - as pointed out by Felicity Emmett of ANZ - over the year to August almost all of the jobs created on a net basis were in the public sector, which is not sustainable.
Here's the headline data:
Moreover, the labour force has unexpectedly exploded over the past couple of years from 13 million to 13.6 million as participation has hit record highs, which makes a significant difference to spare capacity.
Even still, job vacancies as a share of the labour force have implied a lower unemployment rate than we've got, at least based upon historical trends.
The previously held relationship appears to have become rather decoupled, though.
A different angle from which to view how tight the market is involves looking at the number of unemployed persons per job vacancy, and this is now back above 3 and trending higher (if you were to include underemployed persons then the ratio is more like 8:1).
The environment and momentum now generally seem to suggest a slow upwards drift in unemployment.
The environment and momentum now generally seem to suggest a slow upwards drift in unemployment.
At the industry level, mining job vacancies are at their highest levels since 2013, and this is positive news for Western Australia and Queensland.
Indeed, in Queensland jobs vacancies are up by a promising 13 per cent year-on-year, and are now up by nearly 50 per cent since bottoming out five years ago.
Western Australia is following a very similar pattern.
Indeed, in Queensland jobs vacancies are up by a promising 13 per cent year-on-year, and are now up by nearly 50 per cent since bottoming out five years ago.
Western Australia is following a very similar pattern.
On the other hand, the twin construction booms of Sydney and Melbourne are now unwinding from outlandish highs.
As such, there's decent evidence to suggest that the labour markets are no longer tightening in New South Wales and Victoria.
There are multiple different ways to look at this, granted.
For example, the volatile monthly detailed labour force figures for August 2019 released today showed an unemployment rate for Greater Sydney at just 3.97 per cent, while the unemployment rate for Greater Adelaide ran as high as 7.3 per cent.
The smoothed annual averages show a somewhat different picture again; but any way you choose to look at this there is still oodles of slack at the national level, and it's not really improving any more.
The wrap
Overall, jobs vacancies are still pretty solid as a share of the labour force, but the ratio of unemployed persons per job vacancy is rising, and at the headline level the forward-looking indicators are almost unanimously negative.
Mining investment is at last set to pick up from here, but there's going to be a huge hole to plug as apartment building seems to be imploding.
