According to two private surveys issued yesterday, the jobs market remains strong and inflation is easing.
Normally that would be good news, but a couple of caveats must be issued.
The ANZ Bank’s job ads survey showed another solid rise, the latest in a growing series of increases.
And yet it was only a couple of months ago that the bank suggested that a downturn in newspaper job ads could signal a slowdown in weakening in the strength of the jobs market.
Nothing of the sort has happened as the internet job ads market has continued powering ahead.
And the latest TD Securities Melbourne Institute monthly inflation gauge showed headline inflation rising, but underlying cost pressures (measured in a similar fashion to the way the Reserve Bank looks at inflation) easing.
Normally that’s good news, but seeing this measure had top line inflation and underlying inflation both higher than what the CPI and the RBA’s underlying measures reported for the June quarter, it’s something we should examine with a small grain of salt.
But together they mean nothing for the RBA decision to leave rates steady at today’s board meeting.
The key will be the wording of the post meeting statement from RBA Governor, Glenn Stevens and the message it sends to the markets.
The job ads survey from the ANZ does tell us that we can expect another solid month for jobs when the August employment data is released on Thursday.
The ANZ said the total number of jobs advertised in major metropolitan newspapers and on the internet rose by 2.6% in August, to an average of 176,239 per week (seasonally adjusted).
This follows a 1.4% increase in July (originally reported as a 1.3% rise).
"The monthly rise in job advertisements in August followed a strong 6.9% increase over the previous three months from April to June, meaning the series is now 36.1% higher than it was a year ago.
"This is just short of the historic high YoY growth rate of 40.2% that was achieved in May 2007. However the total number of job advertisements remains 36.6% below the all-time peak reached in April 2008.
"The number of internet job advertisements rose by a strong 2.6% in August – an acceleration from the 1.4% rise in July. Internet job advertisements are now 37.8% higher than they were a year ago and are growing at their fastest annual pace since November 2007.
"The number of job advertisements in major metropolitan newspapers rose by 1.5% in August, the second consecutive rise after falls in April through to June. The rise in newspaper advertisements in August keeps yearly growth strong at 11.8%.
"Newspaper job ads saw the largest increases in New South Wales (6.6% MoM), Queensland (4.8% MoM) and the Northern Territory (13.0% MoM) with the greatest falls in South Australia (-6.4% MoM) and the ACT (-0.2% MoM). The other states of Victoria (-0.2% MoM), Western Australia (-0.7% MoM) and Tasmania (0.5% MoM) saw little change in the number of newspaper job ads in August."
The ANZ said that in annual growth terms, newspaper job advertisements are rising in NSW, Victoria, Western Australia and the Territories but falling in Queensland, South Australia and Tasmania. The strength in annual job ads growth is most pronounced in Western Australia (+42.1% YoY) and the Northern Territory (+32.5% YoY), followed by NSW (+16.4% YoY) and Victoria (+16%).
The TD Securities Melbourne Institute monthly inflation gauge rose 0.2% in August, following an 0.1% rise in July and an 0.3% rise in June.
"In the 12 months to August, the inflation gauge rose by 3.0 per cent, resting on the upper bound of the RBA’s two to three per cent inflation target band," TD Securities said in a statement.
The biggest contribution to the change came from price rises for alcohol and tobacco, fruit and vegetables and furniture and furnishings. However, these were offset by price falls for meat and seafood, holiday travel and accommodation and automotive fuel.
But annual underlying inflation is more or less at the mid-point of the Reserve Bank’s range of 2-3%.
The trimmed mean of the inflation gauge was unchanged in August, following a rise of 0.1% in July. In the 12 months to August, the trimmed mean rose 2.3%, drifting towards the bottom of the RBA’s target band.
