Australia job vacancies fall 1.1% in July and may have passed their peak

SYDNEY, Aug 1 (Reuters) – Australian job vacancies fell for the first time in three months in July in a sign that their strong advance may finally have peaked, although they remain at historically high levels that point to a further decline in unemployment.

Monday’s figures from Australia and New Zealand Banking Group Ltd (ANZ.AX) showed total job vacancies fell 1.1% in July from June, as it had increased by 0.4%. Ads were still up 15.6% from a year earlier, to 237,047.

“We may have passed the peak of job vacancies, but the large volume of unfilled applications means the labor market is likely to continue to tighten,” said Catherine Birch, senior economist at ANZ.

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“In fact, we now expect unemployment to fall below 3% by the start of 2023.”

The jobless rate stunned in July, falling sharply to a 48-year low of 3.5% as 88,400 net new jobs were created.

This tight labor market is one reason analysts are confident the Reserve Bank of Australia (RBA) will raise rates this week by at least 50 basis points to 1.85%, the fourth movement since May.

Job vacancies hit a record high of 480,100 in the three months to May, meaning there were almost as many jobs open as there were unemployed.

“Newly arrived skilled migrants, temporary visa holders, students and backpackers are adding to the supply of workers, but also to an already strong demand,” Birch added.

“So while returning migration improves labor mobility and job matching, that doesn’t mean the gap is going to close quickly.”

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Reporting by Wayne Cole Editing by Shri Navaratnam

Our standards: The Thomson Reuters Trust Principles.

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