ANZ Senior Economist, Catherine Birch, commented:
The remarkable 115k rise in employment in May saw the unemployment rate drop to its pre-pandemic rate of 5.1%, in line with the signal from ANZ Job Ads. The 3.0% m/m rise in ANZ Job Ads in June suggests there is more improvement to come in the near term, despite lockdowns.
The recent lockdown in Victoria and current lockdowns in Greater Sydney and surrounding areas and parts of Queensland, WA and the NT will limit further labour market improvements in June and July, but do not derail our positive outlook, as long as restrictions ease as planned and states avoid extended lockdowns. Recent history shows that workers laid off or stood down during lockdowns tend to be reinstated or find new jobs quickly once restrictions lift, given the underlying strength in the labour market and overall demand.
ABS job vacancies data for May, released last week, send an even stronger signal for the labour market outlook than ANZ Job Ads. Vacancies are twice their pre-pandemic level, and there are now 1.9 unemployed people per vacancy, easily the lowest ratio on record. This suggests the unemployment rate has a lot further to fall. The strength in job vacancies is broad-based across industries. While closed borders are accelerating labour market tightening and should mean wages growth accelerates faster than it would otherwise, we think the robust recovery and expansion in demand will continue to be the key driver of employment growth and lower underutilisation.