Job advertisements recorded their biggest increase in almost two years in a hopeful sign for a much-needed pick-up in hiring, but there was confirmation that shops had a poor Christmas period, with retail sales falling in December.
The latest report by ANZ, issued today, showed total job advertisements rose 6 per cent to 191,423 in January in seasonally adjusted terms. That was 0.7 per cent higher than the same month last year and the largest number of ads in nine months.
But the ACT recorded a 3.9 per cent seasonally adjusted fall in newspaper job ads in the month.
RBA: Hopes fade for interest rate cut
In separate data published today, the Australian Bureau of Statistics reported that retail turnover fell a seasonally adjusted 0.1 per cent in December. Analysts expected a 0.2 per cent increase for the month, but the struggling retail sector endured a softer than predicted Christmas. However, the ACT recorded the biggest increase in the country; turnover was up 1.8 per cent in the territory.
"The largest contributor to the [national] fall was food retailing (-0.7 per cent), followed by cafes, restaurants and takeaway food services (-1.8 per cent). These falls were offset by rises in clothing, footwear and personal accessory retailing (3.5 per cent), department stores (1.1 per cent) and household goods retailing (0.2 per cent). Turnover was relatively unchanged in other retailing (0.0%)," the bureau said.
"The state which was the largest contributor to the fall was Queensland (-1.4 per cent), followed by Western Australia (-0.7 per cent), New South Wales (-0.2 per cent), South Australia (-0.7 per cent), the Northern Territory (-2.6 per cent) and Tasmania (-0.1 per cent). Turnover rose in Victoria (1.5 per cent)."
The Australian dollar fell lost ground after the release of weaker-than-expected sales data. The currency was at $US1.0748 just before the data's release, but it fell to $US1.0728 immediately afterwards. It has since regained the losses.
Bank of Melbourne chief economist Besa Deda said consumers were still hesitant to spend up "given the weaker prospect for global growth and the softening of employment growth at home".
Ms Deda said increased discounting likely helped lift sales of clothing and footwear by 3.5 per cent in the month and department store sales, which increased 1.1 per cent.
"Cold weather might have still contributed to weakness in the sense that the rain and cooler weather might have kept consumers indoors more," said Ms Deda.
Retail sales, a key indicator of the strength of the domestic economy, have been under a cloud for most of last year.
The retail sector has been squeezed by online competition for overseas, with consumers using the supercharged strength of the Australian dollar to bypass local shops. Bricks and mortar retailers also face high rent and labour costs compared to their peers in the US and UK whom they are now competing against.
Uncertainty about the health of the economy has also weighted on the confidence of consumers who, like the American and British counterparts, have begun to curb discretionary spending in favour of increased savings and debt repayment.
The official ABS data does not include information on online sales from online-only retail businesses domestically and overseas.
Job ads online
All the increase in job ads came on the internet which climbed 6.4 per cent to 183,406 in January from the month before. In contrast, ads in major metropolitan newspapers fell 2.6 per cent, following a 3.4 percent rise in December.
"This tentative improvement in job ads is very encouraging and is being driven by acceleration in the mining regions, confirming the awaited significant acceleration in mining investment is now beginning to boost labour demand in these states," Ivan Colhoun, ANZ head of Australian economics, said.
A pick-up would be welcome as employment growth slowed to a halt last year as sectors such as manufacturing and retail struggled with consumer caution and a high local dollar.
Still, that slowdown also helped contain inflation and allowed the Reserve Bank of Australia to cut interest rates by half a percentage point to 4.25 percent.
"Against this local backdrop and that of a persistently weak global economy, we have forecast that the RBA will need to cut interest rates by 25 basis points in Q1, most probably in March," said Colhoun.
Many analysts believe the RBA will move more quickly than that and cut at its February policy meeting tomorrow, although there is a growing feeling that rates will be left on hold.
The official jobs report for January is due on Feb. 16, and economists generally expect a bounce in employment after a surprise fall of 29,300 in December.
A private gauge of Australian consumer inflation showed price pressures remained contained in January as a high currency drove down the cost of tradable goods, confirming there was plenty of room for a cut in interest rates this week.
Inflation benign
The TD Securities-Melbourne Institute measure of consumer prices rose by 0.2 percent in January, following a 0.5 percent rise in December. The annual pace slowed to 2.2 percent, from 2.4 percent, leaving it well within the Reserve Bank of Australia's (RBA) long-term target of 2 to 3 percent.
The survey's measure of underlying inflation rose 0.3 percent in January to keep the annual pace at a tame 2.2 percent for a third straight month.
Slower inflation has already allowed the RBA to trim its cash rate by half a percentage point to 4.25 percent, and many analysts see a further cut to 4.0 percent at the next policy meeting on February 7.
with agencies
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