Job ads are down 22 per cent over the past 12 months,falling again in May in a sign of the impact of higher interest rates on the economy.

Job ads are down 22 per cent over the past 12 months,falling again in May in a sign of the impact of higher interest rates on the economy.Credit:Tamara Voninski

SEEK Australia New Zealand managing director Kendra Banks said that while jobs had dropped marginally,they were still above their pre-COVID levels – even despite a tough economic outlook.

“The market continues to show signs of stabilising after periods of rapid growth and decline shaped the labour market last year,” she said.

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“Unemployment remains low,but candidate activity continues to rise,with applications per job ad increasing in 10 of the past 12 months,indicating that Australians are open to change.”

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This week,economists at NAB warned unemployment – whichedged up to 3.7 per cent in Aprilcould reach 5 per cent by the end of next year because of the impact of higher interest rates on the economy.

The Reserve Bank has taken official interest rates from 0.1 per cent in May last yearto an 11-year high of 4.1 per cent. Markets and economists are expecting the cash rate to be pushed up to at least 4.35 per cent.

That has prompted concerns about the impact of such high interest rates on home buyers.

In the minutes of its most recent meeting,the Council of Financial Regulators – which is made up of the RBA,the Australian Prudential Regulation Authority,the federal Treasury and the Australian Securities and Investments Commission – revealed it remains confident that most households will withstand the increase in borrowing costs.

It said even most fixed-rate borrowers have managed the transition to higher mortgage repayments as their low-rate loans are pushed up.

Consumer confidence is now at its lowest point since April 2020,when the economy was shut down to deal with COVID.

Consumer confidence is now at its lowest point since April 2020,when the economy was shut down to deal with COVID.Credit:Steven Siewert

But the minutes also show the council knows low-income households are in trouble.

“Some households are experiencing significant pressure on their finances,including those on lower incomes (including many renters) and those with low savings buffers and high levels of debt relative to their income,” the minutes showed.

The council’s overall confidence in the economy is not shared by consumers,with the ANZ-Roy Morgan weekly measure of shopper confidence falling to its lowest level since the depths of the first COVID pandemic shutdown in April 2020.

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Confidence over the past week fell by 3.1 points and has tumbled by 7.2 points over the past six weeks,with concerns about current and future financial conditions and whether it is time to buy a major household item all within 0.1 percentage point of their all-time lows.

Confidence among those paying off a mortgage fell to a record low,while it also fell among renters and those who own their home outright.

ANZ senior economist Adelaide Timbrell said while confidence had been weak for the past 15 weeks,it had slumped since the start of May.

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