Victoria’s unemployment rate sits above fellow states at 5.1 per cent as the national average was 4.4 per cent in June

One state’s unemployment rate is surging above the rest as it faces a series of “economic problems” keeping unemployment elevated.

The Australian Bureau of Statistics on Thursday revealed the nation’s unemployment rate was steady at 4.4 per cent in June.

Most states had an unemployment rate below 4.4 per cent, but Victoria’s rate of 5.1 per cent pushed the national average higher.

Just over 200,000 unemployed people are in Victoria, making up just less than one third of all unemployed Australians.

EQ Economics managing director Warren Hogan said Victoria’s unemployment rate increase was a sign of economic troubles in the state.

“For the last two years, you’ve seen Victorian unemployment rise by almost two percentage points from around 3.25 per cent to now being over five per cent,” Mr Hogan told Business Now.

“The rest of the country has gone from around 3.5 per cent to just over four per cent.

“If we look at Victoria, it’s got a whole lot of economic problems as we know. But the rest of the country, this number signals economic strength.”

He said the relatively low unemployment rate may also be a sign that cost of living pressures are forcing many Australians into work.

“I think the other big issue is the overall size of the workforce and the participation rate are now trending up again,” Mr Hogan said.

“(This) suggests this cost of living crisis is making people go back into the workforce to find extra work.”

The recent jobs data comes as an interest rate hike at next month’s RBA meeting remains on the cards.

Rates have been lifted three times since the beginning of 2026 and the RBA said another lift may be needed if inflation continues to remain elevated.

Mr Hogan said that Victoria continues to be the “most interest rate” sensitive because that’s where some of the country’s largest mortgages are.

“Victoria’s obviously already got a soft economy and it’s got a massively expanding government having an influence on everything from construction through to the workforce,” he said.

“So, Victoria is going to get hit hard if we do have to see multiple rate hikes.”

Alongside the jobs data, the RBA will examine next week’s inflation figures from the ABS.

Trimmed mean inflation – the middle 70 per cent of price changes – continues to sit outside the RBA’s 2-3 per cent target band at 3.6 per cent.