Job ads plunge 5%

Job advertisements in Australian newspapers and the internet continued to plunge almost 5% last month, marking the largest drop in over seven years – another sign the economy is grinding to a halt.

Job advertisements in Australian newspapers and the internet continued to plunge almost 5% last month, marking the largest drop in over seven years – another sign the economy is grinding to a halt.

The ANZ monthly job advertisements survey found job ads in metropolitan daily newspapers and the internet fell in August by 4.9% to 249,114 ads per week, following a drop of only 0.3% in July.

Job ads in newspapers fell 4% to a 15,015 per week average, following a 5.2% decline in July. Newspaper ads were down 25.8% from the same time last year.

ANZ head of Australian economics Warren Hogan says the 4.9% drop was the largest since February 2001, which is further evidence that hiring intentions across Australia are slowing.

“The recent trends in newspaper job advertisements highlight the risk of an even more rapid slowing of employment growth than previously thought,” he says.

While ANZ forecasts a 5% unemployment rate by mid next year, Hogan says the bank may need to re-adjust that figure if job advertisement averages continue to decline.

“Further declines of the magnitude seen in August may force us to revise our view that we will see only a modest rise in the unemployment rate over the year ahead,” he says.

But Hogan says the decline could help the RBA’s decision to cut interest rates. “If this weakness in job advertisements flows through into rising unemployment in 2009, there will be greater scope for interest rate reductions next year.”