The latest job vacancies data for the August quarter confirms earlier indications that the red hot momentum in the labour market is starting to slow.
The number of job vacancies fell 8.9% over the quarter, the fifth such consecutive decline since mid-2022. Job vacancies are now 15.2% lower than a year ago, a reduction of about 70,000 vacant jobs. This fall has been driven by reduced private sector hiring and record net overseas migration (which is filling previously unmet job vacancies).
Chart 1: Job vacancies, seasonally adjusted (yearly change)
Source: ABS Job Vacancies
Alongside fewer job vacancies, the share of businesses reporting vacancies fell over the quarter and now sits at 22% Australia-wide. About 77% of businesses reporting job vacancies are doing so because of employee turnover and resignations, and job vacancies due to business expansions have now fallen below pre-pandemic levels.
Despite weaker job vacancy levels, the labour market remains a bright spot in an otherwise sluggish economic outlook. August employment data confirms that the participation rate remains at record highs and the unemployment rate is relatively steady at 3.7%. While job vacancies are falling, they remain 71.5% higher than pre-pandemic levels and the share of businesses reporting vacancies is about double.
Making the most of the strength in the labour market is a key focus of the Federal government’s recently released Employment White Paper. The Paper builds on the themes of the Jobs and Skills Summit last year and puts forward a roadmap for more Australians to access secure, well-paid jobs.
Sustained and inclusive full employment is a core priority of the White Paper. The Paper makes clear that the government wants to expand the definition of full employment to account for underemployment and other under-utilisation in the economy (such as those who want to work but are not actively looking, meaning they are not counted as unemployed) – a significant shift away from the existing definition of full employment.
Productivity growth is another key priority listed in the Paper. The government has outlined some ways to boost productivity, including investment in physical and human capital, delivering quality services more efficiently in the growing care sector and increasing adoption of digital technologies. Delivering higher productivity growth will be key to boosting living standards in the long term.
Looking ahead, the White Paper presents 31 future reform directions. These focus on investing in education to build a higher-skilled workforce, tackling systemic disadvantage, effectively targeting skilled migration and reducing disincentives to work. Some policy changes are coming into effect immediately – such as extending the Work Bonus for older pensioners and eligible veterans and increasing the take-up of higher apprenticeships – but the broader objectives are an ambition over many years.
This newsletter was distributed on 5th October 2023. For any questions/comments on this week's newsletter, please contact our authors:
This blog was co-authored by Michelle Shi, Economist at Deloitte Access Economics.
Click on the links below to read our previous Weekly Economic Briefings: