Job vacancies reach a new high

ANZ senior economist, Catherine Birch, said the rise came despite employment increasing by 60,600 in May.

“Growth in demand for labour is still outpacing supply. ABS job vacancies rose 13.8 per cent q/q to a record high 480,100 in May, a much sharper increase than ANZ Job Ads over the same period. ABS job vacancies are defined as jobs “available for immediate filling… for which recruitment action has been taken,” she said.

Ms Birch said recruiters are now using other avenues rather than job ads to try and attract candidates.

“Recruitment action includes measures other than advertising alone. One reason for the larger divergence between ANZ Job Ads and ABS job vacancies recently may be an increased propensity for employers to use channels other than paid advertising to recruit, especially if they expect a reduced rate of success,” she said.

She said the key takeaway for the ANZ researchers is that the sheer volume of unmet labour demand suggests under-utilisation will keep falling and stay low even as demand growth is curtailed by higher inflation and rising interest rates.

“The very tight labour market is a key reason why we expect the Australian economy will be resilient in the face of these,” she said.

“The strength in the labour market was a key factor in the Fair Work Commission’s decision to increase the minimum wage by 5.2 per cent and award wages by at least 4.6 per cent, along with the increased cost of living (and its disproportionate effect on lower paid workers), and the effects on business costs and inflation. These increases will contribute to broader wage growth acceleration in H2 2022.”