Monday, January 12, 2009

Off a cliff: job advertisements vanish

Newspaper job advertisements have collapsed, promting renewed forecasts of recession this year and a jump in unemployment to an 11-year high.

The ANZ Bank says nationwide newspaper job advertisements slipped to just 5,780 per week in December - their lowest level on record and less than half the 12,000 jobs advertised a year before.

The number of jobs advertised in Victorian newspapers dived below 2,000 per week for the first time since the 1991 recession. At just 1,130 jobs per week, the December count was the lowest since the bank began counting Victorian job advertisements in the mid-1970s.

"It suggests that the jobs market could be in worse shape than economists expect," said TD Securities economist Joshua Williamson...

"Even accounting for some substitution towards internet ads over the past five years, the result is staggeringly low".

The news sent the Australian dollar into a spiral, pushing it below 70 US cents for the first time since the start of the year. The dollar hit 68.95 US cents before recovering to close at 69.40 US cents.

"Job advertisements don't normally move markets, but this count points to weaker national income than previously forecast and and even more aggressive interest rate cuts. It's bearish," said Mr Williamson.

Job advertisements collapsed the most in the previously booming states of Queensland and Western Australia, sliding 60 per cent and 57 per cent over the year. They slid a record 53 per cent in Victoria and 52 per cent in NSW.

Australia's total count of advertisements including those on the internet slid a record 30 per cent.

“Australia has no experience of recession since we started collecting internet job ads, so all our longer-term historical comparisons are based on the newspaper series," said the ANZ's head of economics Warren Hogan.

"A 50 per cent decline in newspaper job advertising in a year is historically consistent with economic recession within the next 9 months and a rise in the unemployment rate over the following years."

Economists taking part in this month's Age economic survey forecast a jump in the unemployment rate from 4.4 per cent to 6.4 per cent this year accompanied by barely positive economic growth.

Such an outcome would push an extra quarter of a million Australians into unemployment, lifting the unemployment total from around 500,000 to 750,000.

"The ANZ is expecting the unemployment rate to rise to 6 per cent throughout 2009," said Mr Hogan. "The risk remains skewed towards a worse outcome, particularly if labour shedding or corporate failures intensify."

"In any event the job advertisement numbers indicate that the government's unemployment forecast of 5 per cent by June 2009 is too optimistic. We expect to see an upward revision in the May Budget resulting in a further deterioration in the
Government’s financial position."

The ANZ expects the December figures due for release Thursday to show the loss of 21,000 jobs.

Foreign tourist numbers released Monday showed a sharp dip between October and November as the global economic crisis took hold, with international arrivals down 5 per cent over the year.

"Our tourist deficit is the biggest in two decades," said CommSec equities economist Savanth Sebastian. "In November 483,100 Australians travelled overseas while only 446,400 visitors came to our shores."

Victoria's vanishing job advertisements

December 2004: 3260 per week

December 2005: 2480 per week

December 2006: 2390 per week

December 2007: 2390 per week

December 2008: 1130 per week

Source: Raw ANZ data for the Melbourne Age and Herald-Sun