Victoria lockdown took edge off jobs boom

Colin Brinsden, AAP Economics CorrespondentAAP
Figures on Tuesday will show whether consumer confidence has been buoyed by strong jobs growth.
Camera IconFigures on Tuesday will show whether consumer confidence has been buoyed by strong jobs growth. Credit: AAP

New figures show Victoria's labour market took a hit during the early stages of its recent COVID-19 lockdown, taking the gloss off the exceptionally strong jobs data posted for May.

The Australian Bureau of Statistics said payroll jobs in Victoria tumbled 2.1 per cent in the fortnight to June 5.

Across the nation, payroll jobs declined 0.9 per cent over the two weeks.

ABS head of labour statistics Bjorn Jarvis said the latest figures overlapped the first nine days of the Victoria lockdown.

"Almost every industry in Victoria saw a fall in payroll jobs during this period, with the largest falls seen in the accommodation and food services, and arts and recreation services industries," Mr Jarvis said.

These two industry groups fell 10.2 per cent and eight per cent respectively.

But National Australia Bank economist Taylor Nugent says with the Melbourne lockdown ending on June 10, the weakness in payrolls should only be temporary.

"Strong forward indicators continue to suggest further labour market gains outside of the impact of snap lockdowns and assuming the virus remains contained," he said.

A survey by recruiting expert Hays found almost half of Australian employers intended to increase permanent staff levels in the next 12 months.

At the same time, 15 per cent of the nearly 3500 employers surveyed intended to increase their use of temporary staff.

"Fiscal stimulus and control of the spread of COVID-19 has helped to create a jobs market recovery, with employers navigating their way out of the pandemic and reinvesting in headcount growth," Hays executive Nick Deligiannis said.

"However, acquiring top talent with the right skills is not as easy as it first seems. An old challenge has reared its head once more - skills shortages."

Tuesday's ABS report follows official labour force data last week that showed the jobless rate unexpectedly dropping to 5.1 per cent in May from 5.5 per cent, recovering to pre-pandemic levels.

A massive 115,200 people joined the workforce.

The sharp unemployment rate drop has given Australians an injection of renewed optimism, overcoming the cloud of uncertainty generated by Victoria's most recent COVID-19 lockdown.

The weekly ANZ-Roy Morgan consumer confidence index rose 1.3 per cent to 112.4 points, just a shade under its long-running average.

"This strength in the employment data overshadowed news about the emergence of a COVID cluster in Sydney," ANZ head of economics David Plank said.

Confidence in Sydney rose by 5.2 per cent, while gaining 2.8 per cent across the rest of NSW.

"We know from recent experience, however, that sentiment will likely be impacted negatively if the outbreak worsens and greater restrictions are imposed."

The COVID-19 cluster in in Sydney's eastern suburbs now stands at 21 cases.

Consumer confidence is a pointer to future household spending and has wobbled in recent weeks as a result of the Melbourne shutdown.

Preliminary retail sales figures for May showed a sharp drop in Victoria as the state entered its fourth lockdown, restraining the national spending result to a mere 0.1 per cent.

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