ANZ Job Advertisements Fall Sharply in November

The ANZ job advertisement series fell the most ever in a single month in November. Total job ads fell -8.6% in November, newspaper ads were down -12.0% while internet ads fell -8.4%. From the report:

Annual growth in newspaper ads is now the weakest since 1991, the last
time the economy experienced recession. Annual growth in job ads during the recessions of 1982 and 1991 fell to around -50%, so annual growth as at November 2008 remains above those past recession points.”

Yes for now it remains above those levels, how about in 6 months time?

“Over the last two months, newspaper job advertising has declined by the most in the 30-year history of the survey. This tells us that hiring intentions have been heavily impacted by the latest wave of uncertainty and financial distress caused by the global financial crisis. There is a reliable relationship between newspaper job advertisements and employment over the following six months. If the recent weakness in job ads is sustained, it would be consistent with a contraction in total employment over the first six months of 2009. This of course would result in a much more rapid rise in the unemployment rate than we are currently forecasting.

Who would have thought? An economist underestimating the impact of the global credit crunch. Given the tepid GDP number for the third quarter I think there is good chance that the Australian economy officially entered a recession sometime in October or November. That was quicker than I had anticipated and attests to how sharply the global economy deteriorated in late September into October. We can begin to expect some declines in employment in coming months and the unemployment rate to start a long steady climb.