If economic growth is so strong, why is the number of job vacancies falling?
It’s not because there’s anything wrong with the figures.
Economic growth is indeed above average, or at least it was in the year to March, which is as far as the national accounts take us.
And the number of job vacancies is falling.
The Department of Employment’s count of vacancies newly advertised on the internet – on the SEEK, MyCareer, CareerOne and Australian JobSearch sites – fell in May.
And, according to the figures released on Wednesday, it was the fourth monthly fall in a row for the seasonally adjusted series, meaning the jobs market peaked early this year.
That’s corroborated by the monthly jobs figures from the ABS which showed the trend in employment growth has slowed since February.
The ANZ’s widely-watched count of jobs ads had been rising promisingly as recently as April, but even that recorded a sharp fall in May.
So the figures are all in agreement, although they don’t reveal more than a casual conversation with any jobseeker would easily confirm – there aren’t enough jobs to go around and the situation is, if anything, getting worse.
And yet the national accounts showed the growth rate of gross domestic product (GDP), the principal driver of jobs, was well above average at last count.
Productivity is what gives.
Strong growth in what’s produced – measured by GDP – combined with weak growth in employment means output per worker is growing rapidly.
And the average worker is putting in fewer hours, so growth in output per hour worked is growing even faster than output per worker.
The national accounts show the trend in the broadest measure of labour productivity – GDP per hour worked – was rising an at annualised rate one and half times the long-run average in the first quarter of this year.
In some sectors productivity can’t be measured meaningfully but in the market sector, where it can, the trend in productivity growth in the first quarter was twice the long-run norm.
The upside of that is that it’s stopped legions of pundits from wailing and moaning about the productivity crisis that now turns out to have been a furphy.
The downside is that the faster productivity grows, the faster GDP has to grow to provide enough jobs for the growing population.
But the odds favour a slowdown to below-average growth over the rest of the year, as the mining investment boom winds down, the high exchange rate continues to stifle non-mining growth and governments focus on budget-balancing rather than job-creation.
So it’s highly likely that we’ll see more figures like the Department of Employment’s measure of job vacancies and that jobseekers will continue to do it tough.