Australian job vacancies fell in the three months to August as private sector demand for workers weakened, adding to signs that the labour market is gradually cooling after the Reserve Bank of Australia’s latest interest rate increase.
The Australian Bureau of Statistics said there were 325,000 job vacancies in August, down 0.9% from May on a seasonally adjusted basis and 1.3% lower than a year earlier.
Private sector vacancies fell 2.0% to 286,300, while public sector vacancies moved sharply in the opposite direction, rising 7.8% to 38,700.
The latest numbers extend a longer retreat from the extreme labour shortages seen after the pandemic, with total vacancies now 31.2% below their May 2022 peak of 472,700.
Private sector demand softens
The decline was concentrated in private businesses, providing another indication that higher borrowing costs and softer economic conditions are affecting hiring intentions.
Vacancies have fallen considerably from their 2022 highs, although they remain well above the levels recorded immediately before the pandemic.
In February 2020, Australia had around 227,300 vacancies, meaning demand for workers remains elevated by historical standards despite the recent moderation.
The figures follow August labour force data showing the unemployment rate rising to 4.6%, even as employment increased by around 39,500 people.
That combination suggests the labour market is becoming better supplied as more Australians enter or return to the workforce while employer demand gradually eases.
Retail hiring bucks trend
The industry breakdown was mixed.
Health care and social assistance continued to have the largest number of vacancies at 54,300, although this was down from 56,700 in May.
Retail trade vacancies jumped to 32,400 from 26,000, potentially reflecting businesses beginning to prepare for the peak end-of-year trading period.
By contrast, professional, scientific and technical services recorded a sizeable fall, with vacancies dropping to 29,500 from 35,700.
Accommodation and food services remained another major source of employment demand with 33,700 vacancies, while manufacturing vacancies edged higher to 22,200.
Mining vacancies increased to 11,000 from 10,300, while construction was broadly steady at 20,000.
Labour market enters RBA calculations
The data arrive immediately after the RBA raised the cash rate by 25 basis points to 4.60%, its highest level in around 15 years, as persistent inflation continues to dominate monetary policy.
A softer labour market could eventually help reduce wage and services inflation by easing competition for workers, but job vacancies remain high enough to suggest demand for labour has not collapsed.
The divergence between private and public sector hiring will also be watched closely.
Private vacancies are now falling while public sector demand has strengthened, meaning the overall decline in vacancies understates the degree of cooling occurring across businesses.
Taken together with unemployment at 4.6%, the August vacancy figures provide further evidence that Australia’s labour market is losing some of the exceptional tightness of recent years, without yet showing signs of a severe downturn.
