The ANZ says job advertisements are being placed in the Sydney Morning Herald and Daily Telegraph at a rate approaching 3000 per week, something last seen in the dying days of the mining boom in November 2008. As recently as June there were fewer than 2000 ads placed per week.
"Newspaper ads are a more reliable indicator than ads on the internet because people have to pay for them, or at least the cost is higher," said chief economist Warren Hogan. "Don't get me wrong, it's a good problem to have, but it is actually dangerous to have the jobs market rebounding so quickly."
A near-record extra 207,300 jobs have been created since June at a rate approaching 1000 per day, pushing the unemployment rate down from its peak of 5.8 per cent to 5.3 per cent. Mr Hogan says the February figures to be released tomorrow should add on a further 30,000 jobs... continuing the blistering pace of around 1000 new jobs per day.
The National Australia Bank whose survey yesterday showed business confidence hitting its highest point since May 2002 is forecasting an unemployment rate of 4.75 per cent by end of the year and close to 4.25 per cent by late 2011. It finds 1 in every 5 employers are planning to hire in the months ahead and only 1 in every 7 planning to cut back.
Mr Hogan is worried the surge of employment offers will push up wage offers and push up inflation. "We are beginning this upturn with inflation at the top of the Reserve Bank's target band rather than the bottom as would be typical," he told the Herald. "If you wait for the official figures to tell you you've got an inflation problem you have already missed it. That's what the Reserve Bank did last time around. They won't make that mistake this time, and that's why we could see much higher interest rates by the end of the year.
"At least this time we won't see a recycling of income growth through tax cuts."
So fast does the ANZ expect employment to grow that it believes that the Budget could be back in surplus within two years rather than the five expected by the Treasury.
"We haven't done the final numbers but this year's budget deficit it could be down to $30 billion rather than thew 46 billion official forecast. Next year it could be close to a balanced budget. In fact we can see surplus in 2011-12 quite easily."
"That's because conditions will start well ahead of what was expected. The unemployment rate will have a five in front of it rather than the eight originally forecast and corporate profits will do far better than expected, especially in the banking and resources sectors."
"The really big growth in job ads is in Australia's central-west: South Australia, the Northern Territory and Western Australia. Things are good everywhere, but it's the big resource projects in the west that are sucking up workers and will drive economic growth."
Although the ANZ index doesn't record the type of jobs are advertised, the competing Olivier internet index, now known as the Advantage Index finds big growth in the eastern states in accounting, administrative, legal and information technology jobs.
The ANZ's measure of internet job advertisements has jumped 25 per cent since June.
Published in today's SMH and Age
ANZ Job Ads February 2010
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