The chances of an interest rate rise tomorrow, or failing that, November, have risen with three job ads surveys all revealing a strengthening in demand for labour.
The ANZ Jobs ads series and internet surveys from Seek and the Olivier group all showed a rise in ads for a second month or third month.
The ANZ survey, which also looks at newspaper ads, is perhaps the most watched of the trio, especially in the Reserve Bank as it is considered to be a sort of forward indicator: a pick up generally sees a strengthening of employment in the economy through the ABS figures in future months.
After a year and a half of falls, some huge, and now a fall of more than 50%, the ANZ series picked up in August with a 4.1% gain, and in September saw a rise of 4.4%.
Adding to the feeling of a strengthening in the wider economy (from sluggish to subdued?) was another solid reading from the Performance of Services Index which showed a rise to just under 50, which separates contraction from expansion. Last week the same sort of survey for the manufacturing sector (the PMI) showed a rise well into expansionary territory.
In both cases, the extra Government stimulus spending showed up as a contributing factor to the improvement.
The RBA is known to look closely at these types of surveys. Commentary this morning carried a strong hint of a rate rise tomorrow.
ANZ chief economist Warren Hogan said the latest job ads figures “provide the best evidence we have received to date that the labour market — and the economy more generally — are entering an early recovery phase following this downturn.”
The ANZ said newspaper jobs rose by 3.7%, while internet jobs rose 4.5%.
Mr Hogan said it may take “some time to see sustained net job growth again, even after indicators such as job ads turn up.”
“In the near term, we expect to see further deterioration in the labour market, due to the very low level of demand for new labour, continuing job shedding and continuing strong growth in labour supply,” Mr Hogan said.
ANZ expects the unemployment rate to rise to 6.1% in the ABS numbers for September on Thursday, and to peak at around 7.25% in the middle of next year. The NAB sees it peaking under 7%.
The RBA board meets tomorrow and any decision will come at 2.30 pm.
The Olivier Job Index, released yesterday rose 3.6% last month, posting its second consecutive increase in two months.
SEEK said its online job ads rose 2.8%, seasonally adjusted, in September.
Australian unemployment is 5.8%; America’s rose to 9.8% in September, with an unexpectedly higher than forecast 263,000 jobs lost last month. August’s loss was cut to 201,000, and US analysts had been looking for a loss figure of under 200,000.
That took the total number of jobs lost in this recession in the US to 7.2 million, but that is about to be boosted by more than 800,000 to 8 million as the US Government recalibrates employment numbers based on unemployment insurance statistics.
That puts the Australian experience in a far better light.
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