Australian Job Vacancies Drop by Most in 19 Months

By Victoria Batchelor

July 7 (Bloomberg) -- Australian job-vacancy advertisements declined by the most in almost two years in June, adding to signs employers will pare hiring as economic growth slows.

Jobs advertised in newspapers and on the Internet fell 3 percent from May to an average of 262,075 a week, the biggest drop since November 2006, according to an Australia & New Zealand Banking Group Ltd. report released in Melbourne today.

The central bank raised interest rates to a 12-year high in March to engineer a slowdown in the economy and cool inflation that is running at the fastest pace in almost two decades. Governor Glenn Stevens left borrowing costs unchanged for a fourth month last week, saying there are ``tentative signs'' the jobs market is easing and domestic demand is moderating.

``This report is consistent with a softening in the labor market,'' said Sally Auld, co-head of economics at ANZ Bank in Melbourne. ``Employment growth should ease modestly over the next six months.''

The Australian dollar traded at 96.17 U.S. cents at 11:35 a.m. in Sydney from 96.20 cents before the report was released. The two-year government bond yield fell to 6.74 percent from 6.82 percent on July 4.

Employers cut 19,700 workers in May, ending a record 18 months of job gains, the government reported on June 12.

Economy Slows

Other figures suggest the economy's expansion is losing momentum after the central bank raised its benchmark interest rate to 7.25 percent in March.

The construction industry contracted for a fourth month in June as rising borrowing costs reduced demand for houses and factories, the Australian Industry Group said today.

Qantas Airways Ltd., Australia's largest carrier, said in June that it will slash services to Japan, shift other Asian routes to low-cost unit Jetstar and cut jobs in response to surging fuel costs.

The number of jobs advertised in newspapers fell 3.5 percent in June, today's report showed. Vacancies on the Internet declined 2.9 percent.

To contact the reporter on this story: Victoria Batchelor in Sydney at vbatchelor@bloomberg.net.
Last Updated: July 6, 2008 21:52 EDT