Job vacancy rise 'won't push rates up'

Economists believe the Reserve Bank of Australia (RBA) is likely to retain its tightening bias, with concerns inflation could rise in the medium term, with the lowest jobless rate since 1974.

New figures show there are now less than three jobless people for every employment vacancy.

National job vacancies in the three months to May rose 3.9 per cent, seasonally adjusted, the Australian Bureau of Statistics reported on Thursday.

The ABS also reported in the year to May, job vacancies were up by nine per cent.

Seasonally-adjusted job vacancies totalled 166,900 in May compared with a downwardly revised 160,600 in February.

National Australia Bank chief markets economist Rob Henderson said the vacancies data would reaffirm the RBA's existing monetary stance.

"For the RBA, the vacancy numbers show labour demand is still strong, so the concerns about medium-term inflation are simply highlighted by this data," he said.

CommSec equities economist Martin Arnold said there were no signs wages pressures had intensified.

"The increase in the supply of labour, coming from increased participation locally and through migration, has been enough to offset the increased demand for workers," he said.

Over the past year, the ACT has experienced a 35 per cent rise in job vacancies on an unadjusted basis, even more than the commodities-driven boom state of Western Australia which had 27 per cent growth.

Property and business services posted the highest gains of 3,900 in the three months to May, unadjusted, while retail trade was up by 1,800.

CommSec said the number of unemployed people for every job vacancy had fallen to a record low of 2.8, down from 3.1 jobs for every person in the previous quarter.

ICAP senior economist Matthew Johnson said the jobs vacancies data suggested year-on-year employment growth would ease to two per cent in the second half of 2007 from three per cent, in line with the ANZ job ads series and skilled vacancy reports from the Department of Employment and Workplace Relations.