UPDATE: Australia Job Mkt Shows Signs Of Turning The Corner

SYDNEY -- Australia's labor market continues to show signs of recovery after job ads in August rose for the first time since April 2008, stoking the case for the Reserve Bank of Australia and government to begin removing economic stimulus.

Total job advertisements in newspapers and on the Internet rose 4.1% in seasonally adjusted terms in August from the previous month, according to a survey by ANZ Bank. Advertising on both the Internet and in newspapers rose solidly over the month.

It was the fastest monthly pace of employment growth since December 2007 and follows stronger than expected employment creation in July and a rise in skilled job vacancies in August.

The growing pool of data showing labor demand is starting to recover comes after RBA Governor Glenn Stevens said last month it now appears unlikely the government forecast peak in unemployment of 8.5% by mid-2011 will be reached.

"Today's numbers confirm our optimism that the pace of decline in employment will not be as severe as envisaged six months ago," said Warren Hogan, acting head of economics at ANZ.

"Australian economic activity has been remarkably resilient in recent months, particularly in some of our largest employing industries such as retail trade, health services, government and construction," Hogan said.

Employment data for August to be published Thursday are expected show unemployment at 5.9%, with 15,000 jobs lost through the month, according to a survey of economists by Newswires last Friday.

Financial markets are braced for the RBA to start raising interest rates before the end of the year as the central bank removes what Stevens described last month as emergency settings of monetary policy.

However, the government is warning against the early removal of economic stimulus. Treasurer Wayne Swan told G20 finance ministers at a weekend meeting in London to ensure economic stimulus plans are kept in place.

Finance Minister Lindsay Tanner said Monday the RBA wasn't likely to raise its cash rate target any time soon. The cash rate now stands at a 49-year-low of 3.0%.

"The Reserve Bank is not indicating that it will soon put up interest rates; it is only indicating that at some point in the future, interest rates can be expected to rise because they have been at emergency lows," he told Australian Broadcasting Corp. radio.

Making life hard for the government is the strength of the economy, which grew by 0.6% seasonally adjusted in the second quarter, building on an increase of 0.4% in the first quarter.

The national accounts data snuffed out remaining fears of recession in Australia and put the economy at the forefront of developed nations.

Also Monday, construction activity continued to decline during August, though at a slower pace, according to a performance gauge.

The Australian Industry Group-Housing Industry Association Performance of Construction Index rose 2.9 points in August from July to 42.4.

"The latest results show that total industry activity is continuing to fall amid tight credit conditions and ongoing difficulties amongst firms in securing new project work, particularly within the engineering construction sector," said AIG associate director Tony Pensabene.