The ANZ Bank says Australia will be looking at much higher unemployment than expected in a year’s time.
It says the unemployment rate will rise to around 5.75% at the end of 2009, compared with the rate last month of 4.3%.
The bank says it revised its forecasts after job ads fell in September for a fifth month in a row.
Total job advertisements fell again in September, down 1.4% in the month, following a 4.9% decline in August.
Newspaper job ads rose in September, up 0.7%, although this was more than offset by a 1.5% decline in internet advertisements.
Trend job advertisements continue to weaken, falling 1.8% in September with both the newspaper and internet components down.
The ANZ’s head of Australian Economics, Warren Hogan said in a statement with the bank’s job ads series for September that the weakness in job advertisements has been concentrated in recent months, although the rate of decline has stabilised somewhat in September.
The latest result indicates that hiring intentions continue to soften through the second half of 2008 and eventually this will show up as a weakening of employment growth and a rise in the unemployment rate.
Job ads in major newspapers and on the internet fell to a weekly average of 245,734 ads per week.
Newspaper ads rose to an average of 15,206 a week and were down 24.9% from a year ago with job ads in the Northern Territory rising 16.6%, followed by the ACT, up 3.7%, and 2.8% in Western Australia.
NSW saw ads slide 3.8% and Queensland by 1.6%.
Internet ads fell 1.5% in September to an average 230,529 a week.
The Australian Bureau of Statistics said the nation’s unemployment rose by 0.2% to 4.3% last month, as full time employment fell. There was a marginal net rise of 2,200 total jobs created in the month.
Mr Hogan said the ANZ expects the Reserve Bank of Australia will cut its cash rate by one percentage point over the next year after last week’s 1% slice.
"A further 100 basis points of rate cuts over the next six months is anticipated, taking the cash rate to five per cent by mid 2009," he said.
"The current global economic and financial circumstances can only be described as extraordinary and the Reserve Bank will be monitoring emerging downside risks to the global economy closely.
"A more aggressive easing of policy than is currently anticipated cannot be ruled if the global situation deteriorates further," Mr Hogan said in a statement accompanying the September survey results
Meanwhile figures from the ABS confirmed the further decline in personal and housing credit in August.
The Reserve Bank issued its private credit figures for August and yesterday the ABS said that total personal finance commitments fell 5.2% in August, seasonally adjusted, to $6.240 billion, compared with $6.582 billion in July.
Total commercial finance fell 7.9% in August, seasonally adjusted, to $29.571 billion, from $32.095 billion in July.
Lease finance fell 3.2% in August to $541 million, compared with $559 million in July.
Housing finance for owner occupation fell 2.1% to $12.123 billion in August from $12.386 billion in July.
A big factor in the fall in personal credit was the further decline in outstandings under margin loans, thanks to the drop in share markets.
That will again show up in the September and October figures when they are released in coming months.
