Business

Rise in vacancies points to job growth

Job vacancies in August were sharply higher than three months earlier, indicating recent strong job growth will continue.

An increase in job vacancies points to continued strong employment growth, with analysts forecasting 250,000 in new jobs in the coming year.

Employers were seeking to fill 203,700 positions in August, seasonally adjusted, up six per cent from May, according to the Australian Bureau of Statistics.

Vacancies in the private sector rose 6.1 per cent from May to 183,700, and in the public sector they jumped 5.2 per cent to 20,000.

Commonwealth Bank senior economist Michael Workman said the growing number should see monthly job gains in the range of 18,000 to 22,000 over the next few quarters, and 250,000 jobs added over the next year.

"It will add to the already robust jobs growth of 325,000 over the year to August," he said.

Mr Workman said that should be enough to keep downward pressure on the unemployment rate, given the very gradual downward trend in the participation rate as the population ages.

He expects the unemployment rate to be around 5.4 per cent by the end of 2017, from its current level of 5.6 per cent.

While the vacancies trend has been shifting higher for the past year, new jobs are not uniformly shared across states, regions and sectors, Mr Workman said.

Vacancies have continued to trend higher in the mining sector, due to stronger commodity prices improving profitability and enabling more skilled labour to be utilised, he said.

Callam Pickering, Asia Pacific economist at jobs website Indeed, said vacancies have hit a record high, but there is still a high level of slack in the labour market.

"The number of vacancies per unemployed person is now at a five year low but remains well above its pre-crisis level," Mr Pickering said.

"There are many people who consider themselves underemployed who continue to search for more hours."

The Australian dollar fell following the release of the data, and was trading at 78.20 US cents at 1440 AEST on Thursday, down from 78.49 US cents prior to the release.

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