The Australian labour market is stabilising, judging by the ANZ Jobs Ads survey for July. Welcome as this is, the steadying is at very low levels.

While suffering its 15th monthly fall, the 1.7% drop in newspaper and online job ads was the lowest this year and a discernible slowing can be seen.

The survey showed that the number of jobs advertised in major metropolitan newspapers and on the internet fell by 1.7% in July to a weekly average of 125,207 per week. “This follows a fall of 6.7% in June. The total number of job advertisements in July was 51.9% lower than 12 months earlier,” the ANZ reported.

For second month, newspaper job ads did better than online, according to the ANZ survey. “The number of job advertisements in major metropolitan newspapers decreased by 0.4% in July to an average of 8,162 per week.

“This follows a 0.9% rise in June. Newspaper advertisements are now 48.4% lower than in July 2008. In trend terms, the number of newspaper job advertisements fell by 1.2% in July to be 51.4% lower than a year ago.”

The ANZ jobs news came as the latest survey of manufacturing activity showed another contraction, but for the third month in a row it was a smaller one than in the previous month.

The Performance of Manufacturing Index ‘rushed’ 6.1 points high to 44.5, its highest level for 10 months and further evidence that the sector is on the improve, despite the exaggerated union claims recently that manufacturing would suffer more job losses and pain.

Taken together, along with the continuing strength in building approvals and solid housing credit growth in recent months, the figures will help the Reserve Bank board meeting keep interest rates steady at tomorrow’s meeting.

But the board could soften its bias towards a rate easing and reveal a more neutral or pro-tightening line, as suggested by Macquarie Bank strategist Rory Robertson this morning: “The RBA Board tomorrow will leave its cash rate unchanged at 3% for the fourth-straight month. Policy probably will remain on-hold well into 2010, unless full-time employment starts trending up noticeably in the meantime,” he wrote.

“The main change in the RBA’s policy statement tomorrow presumably will be the advertised shift to a weak tightening bias, dropping the easing focus that featured in both the July policy statement”.