SYDNEY – Australian job advertisements experienced the biggest decline in more than a decade in March amid tight social distance rules and business closures to fight the corona virus.
Tuesday’s figures from the Banking Groups of Australia and New Zealand gave rise to impending pain in the labor market because all parts of the economy were closed.
Total employment advertisements fell 10.3% in March to month, the steepest decline since January 2009 when the global financial crisis raged. That makes advertising an average of 142,504 in March, down sharply 18.2% in the same month last year.
Economists worry that unemployment could surge towards 10% in the coming months, highs not seen since the last major recession in Australia in the early 1990s. The unemployment rate stood at 5.1% in February before rolling shutdowns left many jobless.
The only saving grace is the government’s plan for a $ 130 billion ($ 79.59 billion) “JobKeeper” subsidy, which could blunt the worst of the fall.
“Before the announcement of JobKeeper payments, we estimate 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 that JobKeeper payments will get more workers employed and reduce the peak of unemployment – the economic version of the ‘smoothing curve’.”
The announcement of the scheme seems to have lightened the public mood just a little last week. A separate survey from ANZ and Roy Morgan showed consumer sentiment soared 10.1%, after two weeks of drastic decline.
“Consumers can hardly be said to be cheerful or ready to spend,” said ANZ’s Australian economic head, David Plank. “But glad to comment on better news.”
The Reserve Bank of Australia (RBA) has entered the fray by cutting interest rates to a record low of 0.25%, while launching a massive bond purchase program to protect the economy from the effects of the pandemic.
The central bank holds its April policy meeting on Tuesday and is widely expected to stand for the moment as it measures the effects of the latest easing measures.
The impact of increasingly widespread travel restrictions was shown in official data for international trade on Tuesday, with exports and imports falling sharply in February.
As a result, Australia’s trade balance narrowed to A $ 4.36 billion ($ 2.67 billion) with revenue from tourism down 15% in February to a decline of A $ 1 billion in just two months.
On the other side of the ledger, the debit from tourism when Australians go abroad is hardly affected in February. That is likely to have changed significantly in March when the border was closed, offsetting some obstacles from tourist exports.
($ 1 = 1.6359 Australian dollars)
(Reporting by Wayne Cole; Editing by Sam Holmes)
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