Australian Economy

Seek warns Australia has gone over economic cliff

The latest Seek jobs survey showed that the number of applicants per job ad surged in 2023, well beyond the pre-pandemic level:

Unemployment versus job Applications

The latest Statement of Monetary Policy (SoMP) from the Reserve Bank of Australia (RBA) forecasts that Australia’s unemployment rate will rise to 4.3% by the end of 2024, which is just 0.4% above the current level of 3.9%.

Based on the historical correlation shown in the above chart, this seems like a highly optimistic forecast.

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Seek boss Ian Narev handed down the company’s first half results, with revenue dropping 5% to $596.8 million over the half, while earnings before interest, taxation, depreciation and amortisation (EBITDA) fell 11% to $252.9 million.

Narev attributed the decline to a sharp fall in paid job advertisements in November and December, with hiring and volumes returning to 2019 pre-pandemic levels.

“The reason we have ended up at the bottom end of our revenue guidance is because the trail off from November and December was a bit steeper than we expected”, Narev told The Australian Financial Review.

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This correlates with the weak NAB survey, CPI, Labor Force and Retail Trade numbers from December.

Job ads did bounce back slightly in January, but Australia’s labour force is growing at a furious pace on the back of historically high net overseas migration and Peter Costello’s ‘baby bonus kids’ hitting working age.

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Hence the sharp rise in the number of applicants per job ad, which points to much higher unemployment in 2024.

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