ANZ Senior Economist, Catherine Birch, commented:
ANZ Job Ads rose for an eighth straight month in January. While the pace of growth slowed to 2.3% m/m, we do not think this is cause for concern. Job Ads is heading in the right direction and is now 5.3% higher than its prepandemic level. Other labour market indicators are also looking positive, including NAB’s employment index, which improved dramatically in the December business survey.
Overall, the indicators suggest solid employment gains should continue into H1 2021, and hopefully alleviate the effect of the end of JobKeeper in March, although it will be harder if that support is not replaced by more targeted assistance. Importantly though, the headline labour market numbers mask disparities, with lower paid workers still worse off. This is evident elsewhere too, with Fed Chair, Jerome Powell, noting again last week that “those least able to shoulder the burden have been hardest hit” by the downturn, particularly lower wage workers and minority groups.
The Fed now views maximum employment as a “broad-based and inclusive goal”, emphasising the benefits of a strong labour market, “particularly for many in low- and moderate-income communities”. This is something the RBA may also take into account at its upcoming meetings, when determining policy settings in light of the faster-than-expected economic recovery.
We expect it will maintain its current accommodative policy settings and that an extension of QE could be announced as early as tomorrow.