Job vacancies hit record high; younger Aussies chipper

Skilled job vacancies; Consumer confidence

• The preliminary Internet Vacancy Index (IVI) from the National Skills Commission rose by 8 per cent in April (or 23,135 available positions) to a record high (series since January 2006) of 311,083 available positions. Recruitment activity was up by 33.2 per cent (or 77,525 ads) in April on a year ago and was 84.9 per cent (or around 142,800 available positions) higher than pre-Covid levels.
• The Westpac-Melbourne Institute Index of Consumer Sentiment fell by 5.6 per cent – the biggest fall in 21 months – in May to a 21-month low of 90.4 points, down 20.1 per cent on a year ago.
• Sentiment – for surveyed Aussies aged 18-24 years – rose by 0.9 per cent in May to 110.8 points (above the neutral 100 point level). But confidence for those aged over 45 years dipped 8.2 per cent to a 21-month low of 81.1 points.

What does it all mean?

• Australia’s incredible run of jobs growth likely continued in April. Labour demand remained strong last month as the economy gained momentum, despite multiple challenges for Aussie businesses, including acute cost pressures, persistent supply chain disruptions, rising borrowing costs and political uncertainty.
• In fact, the National Skills Commission’s preliminary Internet Vacancy Index (IVI) jumped by 8 per cent in April – the biggest monthly increase in six months – to a record high (series since January 2006) of 311,083 available positions.
• Recruitment activity was up by an astonishing 33.2 per cent (or 77,525 ads) in April on a year ago and was 84.9 per cent (or around 142,800 available positions) higher than pre-Covid levels.
• Skilled job vacancies rose in all states and territories in April, led by gains in NSW (up 7,027 ads to 14-year highs of 99,012), followed by Queensland (up 5,779 ads to 13½-year highs of 63,050), Victoria (up 5,014 ads to record highs of 81,963), Western Australia (up 2,415 ads to record highs of 35,287), South Australia (up 1,034 ads to 13½-year highs of 15,898), Tasmania (up 255 ads to record highs of 3,725), ACT (up 197 ads to record highs of 8,287) and the Northern Territory (up 179 ads to 10-year highs of 3,330).
• The result bodes well for the April labour force survey when released on Thursday week (May 19, 2022). Commonwealth Bank (CBA) Group economists expect around 30,000 jobs to be added in April, with the national unemployment rate potentially falling to 3.9 per cent, the lowest level since September 1974.
• Consumer sentiment, as measured by Westpac and the Melbourne Institute, fell by 5.6 per cent in May – the biggest fall in 21 months – to a 21-month low (since August 2020) of 90.4 points. Sentiment is down by 20.1 per cent on a year ago, with the index well below its long-run average of 101.4 points.
• The survey was conducted in the week May 1-5, capturing consumer anxiety about rising interest rates after the Reserve Bank hiked the official cash rate by 25 basis to 0.35 per cent on May 3, 2022. The survey found that 77 per cent of respondents expect mortgage interest rates to lift over the next year, with 52 per cent expecting rates to increase by more than 1 per cent.
• In response, the ‘mortgagor’ confidence sub-index fell by 2.9 per cent in May to 91.7 points, the lowest level since August 2020. Confidence for homeowners without a mortgage fell by 3.9 per cent to 93.7 points.
• Sentiment for those aged over 45 years dipped 8.2 per cent to a 21-month low of 81.1 points in May, despite improved prospects for increased interest incomes from bank deposits. But younger Aussies remained most resilient with sentiment for those aged 18-24 years up by 0.9 per cent to 110.8 points. The easing of government virus restrictions and the lowest youth unemployment rate in 13½ years in March may have boosted confidence.
• Given persistent worries about elevated inflation and higher interest rates, it was no surprise to see consumer views on their finances deteriorate in May. According to the survey, the ‘family finances next 12 months’ sub-index dropped by 11.2 per cent to a 21-month low of 93.3 points. And in a sign cost of living pressures are weighing on consumer spending intentions, the ‘time to buy a major household item’ sub-index was down by 5.7 per cent to a 21-month low of 92.6 points.
• Consumers have also become more pessimistic about the economy and the job market, despite the unemployment rate hitting near 48-year lows of 3.95 per cent in March. The measure of ‘unemployment expectations’ index fell (deteriorated) by 10.5 per cent in May to 109.6 points. The sub-index lifted from 99.2 points in April, the second lowest reading since March 1996. And the ‘economy, next 12 months’ sub-index was down 5.8 per cent to a 21-month low of 90.4 points with the ‘economy, next 5 years’ sub-index down by 4.1 per cent to a 21-month low of 96.2 points.
• By occupation, Westpac economists reported that, “Confidence levels are weakest for those employed in hospitality; retail; construction; education; health; the arts; and professional services while those in mining; IT; telecommunications and media; wholesale trade; and government are all registering solid positive reads.”
• Geographically, confidence fell across all major states, led lower by Tasmania (down by 19.1 per cent), followed by Queensland (down 11.7 per cent), NSW (down 4.6 per cent), Western Australia (down 4.2 per cent), Victoria (down 2.8 per cent) and South Australia (down 0.4 per cent). And sentiment in regional or rural Australia dropped by 5.7 per cent.

What do you need to know?

Skilled job vacancies – April

• The preliminary Internet Vacancy Index (IVI) from the National Skills Commission rose by 8 per cent in April (or 23,135 available positions) to a record high (series since January 2006) of 311,083 available positions.
• Recruitment activity was up by 33.2 per cent (or 77,525 ads) in April on a year ago and is 84.9 per cent (or around 142,800 available positions) higher than pre-Covid levels.
• Skilled job vacancies rose in all states and territories in April, led by gains in NSW (up 7,027 ads or 7.6 per cent to 14-year highs of 99,012), followed by Queensland (up 5,779 ads or 10.1 per cent to 13½-year highs of 63,050), Victoria (up 5,014 ads or 6.5 per cent to record highs of 81,963), Western Australia (up 2,415 ads or 7.3 per cent to record highs of 35,287), South Australia (up 1,034 ads or 7 per cent to 13½-year highs of 15,898), Tasmania (up 255 ads or 7.3 per cent to record highs of 3,725), ACT (up 197 ads or 2.4 per cent to record highs of 8,287) and the Northern Territory (up 179 ads or 5.7 per cent to 10-year highs of 3,330).
• The detailed IVI is scheduled for release on Wednesday 25 May 2022.

Consumer confidence – May

• The Westpac-Melbourne Institute Index of Consumer Sentiment fell by 5.6 per cent – the biggest fall in 21 months – in May to a 21-month low of 90.4 points, down 20.1 per cent on a year ago.
• Four of the five major components of the index fell in May.
• Of the other key sub-components in May:
  • The ‘time to buy a dwelling’ index fell by 1.6 per cent to 77.5 points.
  • The ‘house price expectations’ index dipped by 9.4 per cent to 121.4 points.
  • The ‘unemployment expectations’ index rose (deteriorated) by 10.5 per cent to 109.6 points
• The survey was taken over the period May 1–5, 2022.