Job vacancies point to a softer private labour market
Australian job vacancies fell again in August, but the headline conceals a sharper decline in private-sector labour demand. Vacancies per unemployed worker have almost halved from their 2022 peak.
Australia's labour market remains relatively tight, but the latest job vacancies data contain a clearer signal that labour demand is cooling.
The ABS estimates there were 325,000 job vacancies in August, down 0.9 per cent over the quarter and 1.3 per cent over the year in seasonally adjusted terms. Vacancies are now 31.2 per cent below their May 2022 peak.
The headline, however, understates what happened in the private sector.
Private-sector vacancies fell 2.0 per cent to 286,300, equivalent to roughly 5,800 fewer vacant positions. Public-sector vacancies jumped 7.8 per cent to 38,700, adding roughly 2,800 vacancies and offsetting almost half the private-sector decline.
That public-sector increase should not be over-interpreted. On the smoother trend measure, public vacancies actually fell 0.5 per cent during the quarter and are 3.5 per cent lower than a year ago. Private vacancies fell 1.0 per cent in trend terms. The underlying picture is therefore one of broader labour-market easing.
An even better measure of that change is vacancies relative to the number of people looking for work.
There were 722,900 unemployed Australians in August, alongside 325,000 vacancies — equivalent to about 45 vacancies for every 100 unemployed people. Around the May 2022 vacancy peak, the comparable ratio was approximately 84 vacancies per 100 unemployed people. Labour-market tightness on this measure has therefore almost halved.
The industry data also reveal substantial rotation. Professional, scientific and technical services vacancies fell from 35,700 to 29,500 — a fall of 6,200 positions, or 17 per cent. Wholesale vacancies fell by 2,900 and health care by 2,400. By contrast, retail vacancies jumped by 6,400 and financial and insurance services increased by 1,300.
For the RBA, the numbers point in the direction it has been expecting. In August it forecast a gradual easing in labour-market conditions, and after increasing the cash rate to 4.60 per cent on 29 September, the Bank said labour-market conditions had eased broadly as expected and leading indicators remained broadly stable.
Today's figures do not signal a weak labour market. But they provide little evidence of a renewed economy-wide hiring boom either.
That matters because, beneath the inflation headlines, one important source of domestic capacity pressure is continuing to ease.
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