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Highlights
- After rising for two consecutive months, job advertisements fell in December, as fears surrounding the Omicron strain consumed investors’ minds.
- Jobs have continuously been on a decline, and 2021 provided some relief to the unemployed workforce, as employment rose 2.9% in November alone.
- Many individuals have delayed a job switch due to the pandemic and have remained in their current company owing to a comfortable environment.
Rising job advertisements were hailed as one of the key forces behind buoyant expectations for the economy in 2022. After rising for two consecutive months, job advertisements fell in December, as fears surrounding the Omicron strain consumed investors’ minds. Though the dip in job ads may just be temporary, the current slowdown is expected to affect economic growth and hinder labour market recovery.
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Australia and New Zealand Banking Group Limited (ASX:ANZ) has recently released data on job advertisements for December, which has been a letdown after the previously released promising figures. The report suggests that Australian job ads fell 5.5% on a month-on-month basis in December 2021. A key factor behind this fall is the dampening effect of the Omicron variant. Additionally, a record surge in employment during November is believed to be a factor leading up to this fall.
High November employment
Experts suggest that the massive wave of employment that took place in November likely filled up many available positions. A total of 366,100 people were reportedly employed in November, which was an extraordinary feat for the labour market. Since the outbreak of COVID-19, jobs have continuously been on a decline, while 2021 provided some relief to the unemployed workforce, as employment rose 2.9% in November alone.
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An additional factor making things tougher for the labour market was the declining business confidence. There is also a possibility that companies are pulling back their hiring drives, expecting a slowdown owing to the quick spread of the Omicron variant. The new variant has been touted to be more communicable than the previous strains and experts suggest it is a faster spreading strain.
Consequently, businesses and consumers are more likely to hold themselves back as the present uncertainty prevails.
Uncertainty to continue
The rise in Omicron cases has prompted businesses to refurbish their strategies and forming a clean slate. As the full effects of the variant are not yet known, most individuals are choosing to tread cautiously to avoid any surprises.
According to experts, job-switching rates could rise in 2022 as consumers and businesses regain the lost confidence. This expectation is based on the fact that in November last year, 5.3% of workers did not expect to stay with their current employer within 12 months. A factor pushing this switch is that many individuals have delayed a job switch due to the pandemic and have remained in their current company owing to a comfortable environment or simply to avoid disturbance to their existing setup.
Bottom Line
Under the influence of these results, healthcare, technology, and industrial sectors have taken a massive hit. Overall, a greater number of stocks have declined compared to those that have risen, mainly due to the fears surmounting to the Omicron strain. Thus, it seems the economy has entered a phase quite similar to the initial few days of the pandemic when uncertainty ruled everyone’s minds.
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