Jobs market is cooling
The Aussie economy slowed significantly through 2023.
In February, job advertisements fell by a further -2.3 per cent (or -5,900 job ads) to a seasonally adjusted 247,400.
That's down -12.8 per cent from a year earlier.
Recruitment dropped in all states and territories over the month, and the largest decline over the past year was seen in Victoria (-19.6 per cent).
Source: IVI, Jobs & Skills Australia
247,400 is still a historically high number of vacancies - about 50 per cent higher than pre-pandemic levels - so there's no doubt that we should still see plenty of hiring ahead.
However, the labour force is also growing very rapidly through immigration - in fact faster than we've ever seen before - so these dynamics presage further increases in the unemployment rate.
Source: IVI, Jobs and Skills Australia
Overall, the enormous spike in job advertisements after the economy reopened (while the international borders were still shut) has now receded.
Advertisements are continuing to normalise, and with immigration powering ahead the unemployment rate will likely continue increasing to around 4½ per cent.
Inflation battle rages on
Further long-established construction company failures this week might speed up that process a bit, and at some point the central bank will likely throw in the towel and start cutting interest rates.
Canada's inflation rate came in well below expectations in February at +0.1 per cent, and fell to just 2.8 per cent over the year (3-month annualised measures of core inflation are now essentially back to the target).
In the Eurozone inflation has fallen to just 2.6 per cent over the year to February.
As such, the war on inflation isn't quite won, but arguably we're getting closer.
It's quite remarkable how synchronised inflation measures around the developed world have been, so hopefully this means that Australia too will be back towards 3 per cent before too long.
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The Reserve Bank of Australia kept up its pause in interest rates as detailed by
James Foster here.
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