The falls in on line and newspaper job ads for the first time in three months last month is not an end of the world occurrence, or worthy of leading TV or radio news bulletins, as the yarn did for a while yesterday.
The 1.7% drop may have been linked to the Reserve Bank’s first rate rise, but that’s immaterial. It’s just a monthly variation in a developing trend.
Other figures out yesterday on housing finance showed the build up of a strong rise in home building activity (and employment) is well underway and will intensify in 2010.
And a very solid September quarter report from the Commonwealth Bank also tells us that the wider economy is on the improve, especially with the bank revealing its bad debts experience is well under control.
The ANZ report showed that job ads totalled 133,709 in the month, down from 136,070 in September, with newspaper job ads falling by 1.4% and internet job ads declining by 1.8%.
The October fall was after rises in September and October of 4.1% and 4.4% respectively.
The ANZ said the number of job advertisements in major metropolitan newspapers fell 1.4% in October to an average of 8,800 per week.
This follows a 3.7% rise in September. Newspaper advertisements are now 10.6% higher than their cyclical low in March 2009, but 33.8% lower than a year ago.
In trend terms, the number of newspaper job advertisements grew by 1.4% in October, their fifth consecutive month of trend growth.
The survey showed the biggest increase in newspaper job advertisements in September was in Tasmania (+7.4%), followed by South Australia (+2.7%), New South Wales (+2.1%) and the Northern Territory (+1.1%). Western Australia (-6.3%), the ACT (-5.0%), Queensland (-2.3%) and Victoria (-0.2%) all experienced declines.
The number of internet job advertisements fell by 1.8% to average 124,909 per week and they remained 42.8% lower than a year earlier.
In fact the fall is typical of a recovery in employment; nothing is linear or increases month after month.
If the fall is translated in the October labour force figures from the Australian Bureau of Statistics on Thursday, it might be enough to put the Reserve Bank’s rate rise program on hold until February. Market forecasts are for a loss of around 10,000 jobs to be reported.
But it is only a ‘might’.
The Olivier job index, which measures online job ad demand and interest, dropped 1.67% in October, following two month’s gains, in a report released at the weekend.
"We’re up 4.32% over three months, so it’s still positive," said Olivier Group director Robert Olivier in a statement.
"But we can’t help thinking that interest rate rises may have taken the edge off growth in employment," he said.
A quarterly update from the Commonwealth Bank yesterday showed the September quarter was a cracker for the country’s biggest bank: $1.4 billion in cash earnings, better than expected, bad debts under control, net interest margin rising, and the bank’s wealth management business riding the market rebound.
And it’s no wonder with the Australian Bureau of Statistics revealing a 5.1% rise in home loan approvals in September, after the 0.6% fall in August. The number of loans approved for all dwellings rose 4.8% in the month to $23.847 billion.
Home loans approved for the construction of new homes jumped 8% in the month and loans approved for the purchase of existing homes were up a solid 5.0%.
But loans to buy already built new homes slipped 0.6% in September.
The rise, while a surprise, was put down to a rush to buy homes before the reduction in the boost to the federal government’s First Home Owners Grant at the end of that month.
The market had forecast a 3% rise in home loan approvals for the month.
The big four banks, led by the Commonwealth, dominate home lending, especially to first home buyers and builders.
The ABS said the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose, increasing from 24.7% in August to 26.1% in September.
It’s likely home loan approvals will ease when the October figures are reported this time next month with the rush from first home buyer/builders falling off.
Don’t believe how the surge in home loan approvals means a rate rise is now on the cards. It’s not. A weak employment report on Thursday could quash all thoughts of rate rises until 2010.
