ANZ Senior Economist, Catherine Birch, commented:
ANZ Job Ads continued its impressive recovery in December, rising 9.2% m/m (seasonally adjusted1), surpassing its pre-pandemic level to record the highest result in 18 months. The ongoing strength was likely supported by Victoria, where the labour market still has ground to make up. December’s COVID spike in New South Wales is unlikely to have had a material effect on Job Ads so far.
The fast-paced recovery in ANZ Job Ads means solid employment gains should continue into early-2021 at least. It also suggests the unemployment rate could fall quite quickly in 2021 (Figure 1). For this to occur, we think ANZ Job Ads would have to exceed pre-pandemic levels for an extended period. But we expect challenges in the first half of 2021 will temporarily slow employment growth and delay improvements in the unemployment rate.
The end of JobKeeper in March is a key risk. We also expect to see some trade-off between unemployment and underemployment. The current spike in COVID cases is a risk as well, particularly if restrictions tighten.