Tough times ahead: job vacancies slide as unemployment rises
As Prime Minister Kevin Rudd regains leadership of the country, he is inheriting an economy in which it is getting harder to find a job.
New figures show there are now five unemployed people for every vacant job in Australia, as two economic forces work in opposition: the number of job vacancies has fallen in the last year, while the number of unemployed has increased by 50,000.
In the past week nearly 1200 jobs have been cut from the mining industry as companies reassess expansion plans in the face of falling commodity prices.
Australia's most authoritative job vacancy survey compiled by the Bureau of Statistics shows there were just 138,700 vacant roles in May, down from 177,800 a year ago.
Some states and territories fared better than others.
The Northern Territory was the best place to look for work, with just 2.1 unemployed locals for each vacant job last month. Western Australia was the next best place, with 2.6 unemployed people per vacancy.
By contrast, in NSW there were nearly six unemployed fighting for each available job last month, while in Tasmania there were nearly 11, which makes finding a job unlikely. Victoria remained stable with 5.1 unemployed people competing for every vacant job.
Economists expressed surprise at the result in Victoria, given the state has shed a large number of manufacturing workers.
"If you had asked me which state was doing it toughest I would have said Victoria, without question, because of the high dollar, and because they had a bit of a boom in 2010 and things have slowed down since then," St George chief economist Hans Kunnen said. "It could have something to do with the discouraged worker effect."
Of the 18 industries in the Bureau of Statistics survey, 15 recorded a decline in the number of job vacancies, with mining, wholesale trade and property and business services recording some of the largest declines.
The fall in job vacancies sat uncomfortably with the rise in the unemployment rate.
Last month the unemployment rate rose to 5.6 per cent, from 5.1 per cent a year ago. More than 687,700 Australians were looking for work last month, up from 624,900 in May last year.
ANZ economic analyst Savita Singh said the job vacancy numbers suggested labour market conditions remained "very soft" and may point to a further rise in the unemployment rate.
But Mr Kunnen said the fact the interest rate cycle may not have bottomed meant the labour market could improve next year, while sentiment may improve once the federal election is out of the way.
"Interest rates have fallen and they could fall a touch more, and we haven't seen the full impact of that," Mr Kunnen said.
"Things could be better next year. We've got a lower dollar, we'll still have low interest rates, and we'll have a potential psychological circuit breaker with the federal election, whenever that may be."