It was found that in spite of better-than-expected employment results in February, 80% of vacancies were accounted for because of replacements and resignations. “ANZ Job Ads rose 0.4% month over month in March, to be up 57.5% on the pre-pandemic level,” said Catherine Birch, ANZ Senior Economist. “Labour demand is elevated and continuing to grow, confirmed by ABS job vacancies data which showed a rise of 6.9% quarter over quarter in February to a new record high.”

“The share of employed who do not expect to be with their current employer in 12 months due to seeking other employment remains well above the pre-pandemic level,” she said. “Together these indicators point to further solid employment gains and upward pressure on wages growth.”

In February, employment had risen by 77,000, well above the market expectations of 37,000. Simultaneously, unemployment dropped to 4.0% even as the participation rate rose to a record high of 66.4%.

“The 2022-23 budget showed the Treasury expects the labour market to tighten further, forecasting the unemployment rate to reach 3¾%in Q3 and remain there until mid-decade,” Birch said. “We are more optimistic, forecasting an unemployment rate in the low-3s by the end of this year, which presents upside risk for fiscal revenue.”