SYDNEY — Australian job advertisements suffered their largest drop in more than a decade in March amid strict social distancing rules and business closures to combat the coronavirus.
Tuesday’s figures from Australia and New Zealand Banking Group gave a foretaste of the pain to come in the labour market as whole sections of the economy shut down.
Total job ads dived 10.3% in March month-on-month, the steepest decline since January 2009 when the global financial crisis was raging. That left ads averaging 142,504 in March, down a steep 18.2% on the same month last year.
Economists fear unemployment could spike toward 10% in coming months, heights not seen since the last major recession in Australia in the early 1990s. The jobless rate stood at 5.1% in February before rolling shutdowns threw many out of work.
The only saving grace was a government plan for a A$130 billion ($79.59 billion) “JobKeeper” subsidy, which could blunt the worst of the fallout.
“Prior to the JobKeeper payment announcement, we forecast that more than 1.1 million workers could lose their jobs and the unemployment rate could rise to a peak of 13%,” said ANZ senior economist, Catherine Birch.
“However, we think the JobKeeper payment will keep more workers employed and reduce the peak in unemployment – the economic version of ‘flattening the curve’.”
The announcement of the scheme looked to have lightened the public mood just a little last week. A separate survey from ANZ and Roy Morgan showed consumer sentiment bounced 10.1%, following two weeks of drastic declines.
“Consumers can hardly be said to be cheerful or ready to spend,” said ANZ’s head of Australian economics, David Plank. “But it is nice to be commenting on some better news.”
The Reserve Bank of Australia (RBA) has charged into the fray by slashing interest rates to a record low of 0.25%, while launching a massive bond buying programme to cushion the economy from the impact of the pandemic.
The central bank holds its April policy meeting on Tuesday and is widely expected to stand pat for now as it gauges the effect of its latest easing measures.
The impact of ever-widening travel restrictions showed in official data for international trade out on Tuesday, with both exports and imports falling sharply in February.
As a result, Australia’s trade balance narrowed a touch to A$4.36 billion ($2.67 billion) with earnings from tourism sliding 15% in February to be down A$1 billion in just two months.
On the other side of the ledger, debits from tourism as Australians went abroad were hardly affected in February. That is likely to have changed markedly in March when borders were closed, offsetting some of the drag from tourist exports.
($1 = 1.6359 Australian dollars)
(Reporting by Wayne Cole; Editing by Sam Holmes)