So it'll keep rates on hold today at 2.30 pm
Australia's Reserve Bank board will hold its nerve and keep interest rates steady today despite new evidence pointing to a hiring freeze and jump in unemployment.
The ANZ's count of newspaper and internet job advertisments slipped a further 6.7 per cent in June to to its lowest level since the take-up of internet advertising - roughly half its level of a year ago.
Newspaper job advertisements in The Age and the Herald Sun bounced back from earlier losses in June to be roughly steady over the last five months and down 50 per cent on the year.
ANZ economist Warren Hogan believes that while employers have stopped hiring they so far still "hoarding labour" and are yet to seriously shed staff.
"For the moment population growth is driving the unemployment rate up rather than widespread job losses," he says...
"The key to the future is whether this continues of whether labour shedding picks up."
Forecasters surveyed by Reuters expect a further 25,000 jobs to be lost when the official figures are released on Thursday, which combined with population growth would push up the unemployment rate from 5.7 to 5.9 per cent. Most expect an unemployment rate of 7 per cent by December.
The Reserve Bank board will be unmoved by the outlook for Australian unemployment when it holds its monthly meeting in Sydney this morning, focusing instead on improving prospects for Australia's biggest export customer China.
Since the Bank's governor Glenn Stevens declared China's recovery to be "real" at a business function in May, Reserve Bank staff have firmed in their view that China's increased demand for Australian raw materials reflects an economic rebound rather than speculative stockpiling.
Australia's exports to China have hit record highs in each of the last 3 months, eclipsing exports to Japan.
The Bank believes that while there might be an element of speculation to these purchases they are primarily driven by real and probably sustainable demand flowing from the Chinese government's stimulus program that is fundamental and probably sustainable.
The Bank expects the International Monetary Fund to revise up its outlook for China when it reports on Wednesday.
At home the Reserve Bank is buoyed by confidence surveys suggesting a return to optimism amongst businesses and consumers and by some of the results from its business liaison program.
A Treasury report on its separate business liaison program finds conditions in the mining sector better than had been expected and Australia's retail and construction sectors "buoyant."
However it finds manufacturing conditions mixed, with "those operating in the food and beverage sector or supplying lower value retailers generally enjoying relatively benign conditions" and "those engaged in the production of consumer durables and business plant and equipment less sanguine".
But is says even amongst heavy manufacturers "several contacts believed the bottom of the current economic cycle may have been reached".
On employment the Treasury finds accounts of planned job cuts "less prevalent than in past months, with the outlook relatively steady among those firms contacted, subject to the economic outlook holding up".
Financial markets expect the Reserve Bank to keep rates on hold today for the third consecutive month, but expect at least one further cut in the Reserve Bank's 3.00 per cent cash rate by the end of the year.
Job advertisements slide
In the last month:
Internet advertisements down 7%
NSW newspaper advertisements down 1%
Victorian newspaper advertisements up 7%
In the last 12 months:
Internet advertisements down 51%
NSW newspaper advertisements down 48%
Victorian newspaper advertisements down 50%
Queensland advertisements down 62%
Western Australian advertisements down 61 per cent
ANZ job advertisement series
Published in today's SMH and Age