Rising job ads 'signal worst over'

SYDNEY - The number of Australian job advertisements has increased for a second straight month in a sign the economy has passed through the worst of the global downturn and is on the road to recovery, a survey shows.

The number of jobs advertised in newspapers and on the internet rose 4.4 per cent last month, a survey from ANZ Banking Group published yesterday said.

It was the strongest pace of increase since December 2007 and followed a 4.1 per cent improvement in August.

Job ads had declined for 15 straight months between May last year and July this year.

ANZ acting chief economist Warren Hogan said the September data was the the best evidence to date that the labour market - and the economy more generally - was entering an "early recovery phase".

"Looking further ahead, today's numbers confirm our expectation that the pace of decline in employment will not be as severe as envisaged six months ago," he said.

"Australian economic activity has been remarkably resilient in recent months, particularly in some of our largest employing industries such as retail trade, health services, government and construction."

But despite the pickup, Hogan said total job ads "remain at low levels", given they were still 44.9 per cent lower than at the same time last year.

The number of job advertisements in Australia's major metropolitan newspapers rose 3.7 per cent last month, while jobs on the internet grew by 4.5 per cent.

Both measures were up for a second straight month.

Hogan said rapid growth in the labour force, due to strong population growth and high levels of participation, (ie the percentage of the population either working or looking for work) was the main cause of rising unemployment.

He said the deterioration in the labour market had featured "rising underemployment rather than rising unemployment", as managers cut working hours for their employees rather than sack staff.

These factors were likely keep the pace of jobs growth subdued as the economy picked up, he said.

"Once the recovery commences, this process is likely to slowly reverse, with working hours for existing employees creeping up again before total employment numbers begin to grow," Hogan said.

"It may therefore take some time to see sustained net job growth again, even after indicators such as job ads turn up."

The national unemployment rate has been steady at 5.8 per cent for the past three months, with the Australian Bureau of Statistics due to release the September labour force report on Thursday.

The median market forecast was for the jobless rate to rise 0.2 percentage points to 6 per cent.

ANZ expects the unemployment rate to peak at 7.25 per cent in the middle of next year.

"In the near term, we expect to see further deterioration in the labour market," Hogan said.

This was due to "the very low level of demand for new labour, continuing job shedding and continuing strong growth in labour supply", he said.

- AAP