Job vacancies dip as a still tight labour market cools

Job vacancies have fallen for the sixth straight quarter but remain elevated compared to pre-pandemic levels.

The number of available jobs has fallen for the sixth consecutive quarter as a still tight labour market cools, although vacancies are still at an elevated level.

Job vacancies fell slightly in the three months to November, dropping by 0.7 per cent to 388,800, according to the latest data from the Australian Bureau of Statistics.

The number of vacant jobs has now fallen by 18.3 per cent from the May 2022 peak, but vacancies remain high compared to pre-pandemic levels.

ABS head of labour statistics David Taylor said it was the sixth straight quarterly drop in job vacancies.

“However, this quarter saw a relatively small decline, compared with the 8 per cent fall in August,” Mr Taylor said.

“Job vacancies remain well above their pre-Covid-19 pandemic level – around 71 per cent higher than February 2020.”

NAB head of market economics Tapas Strickland.

AMP Capital chief economist, Shane Oliver. Picture: Facebook

Mr Taylor said the slow fall in the number of job vacancies from the peak also coincided with increases in the unemployment rate, although both continued to suggest that the labour market remained relatively tight.

“The number of unemployed people per job vacancy was 1.5 in November. While this is higher than 1.1, when it was at its pandemic low, it is still well below the 3.1 figure in February 2020,” Mr Taylor said.

“Similarly, the most recent labour account data for the September quarter showed that job vacancies still accounted for around 2.6 per cent of jobs in the labour market, which was well above the 1.6 per cent from the March quarter 2020.”

NAB head of market economics Tapas Strickland said the bank had expected a larger quarterly fall in job vacancies given trends in job advertising.

Mr Strickland said there was nothing in the data to suggest a “dramatic” near-term rise in the unemployment rate.

“Taking the data at face value suggests a still tight labour market, despite some other indicators such as job advertising showing a larger fall.

“And importantly, there is nothing in today’s data to suggest the unemployment rate will rise dramatically in the near-term.”

The unemployment rate hit an 18-month high of 3.9 per cent in November, as a bumper month of jobs growth was more than offset by a growing labour force.

AMP chief economist Shane Oliver said the continued decline in job vacancies pointed to more cooling in the labour market.

“With job vacancies, job ads, and the ratio of job vacancies to unemployment now all deteriorating, the jobs market is clearly cooling which will take pressure off wages growth, which in turn will add to the fall in inflation,” Dr Oliver said.

Monthly consumer price index data, also released by the ABS on Wednesday, showed inflation slowed to its lowest level in nearly two years at 4.3 per cent in November.

CBA senior economist Belinda Allen said despite the still high level of vacant jobs, employment growth was slowing and the number of unemployed people was rising.

“While the labour supply has expanded rapidly due to a large inflow of net overseas migration, a skills mismatch seems evident,” Ms Allen said.

“This suggests job vacancies could remain elevated while employment growth continues to slow.”

The rental, hiring and real estate services industry recorded the biggest quarterly fall in job vacancies with a 14 per cent decline, while vacancies in education and training dropped by 12 per cent.

The only industries to record a rise in vacancies were mining, up two per cent, and public administration and safety, up 1 per cent.