Businesses hiring needs are on the rise, but the labour market remains too tight for the Reserve Bank, an economist warns. <\/p>\n
Fresh figures released by the Australian Bureau of Statistics shows there were 337,9000 job vacancies as of February 2026, the highest level since November 2024.<\/p>\n
The jobs shortfall was widespread with 12 of the 18 sectors looking for more staff over the previous three months.<\/p>\n
The construction sector led the way up 19.3 per cent compared to last year, while the retail trade, accommodation and food services industries also showed a jump in the need for workers. <\/p>\n
Despite employers saying they needed more staff, there were only two unemployed people per job vacancy, slightly down from 1.9 per cent a year ago. <\/p>\n
Prior to the pandemic there were three jobs for every unemployed person. <\/p>\n
APAC economist Callam Pickering said this tight labour market would likely lead to further interest rate pain. <\/p>\n
\u201cThe latest labour market data clearly shows that the job market remains tight,\u201d he said.<\/p>\n
\u201cWe still expect the RBA to hike rates again in May to push that process along.\u201d<\/p>\n
Australia\u2019s central bank runs a dual mandate, having to keep inflation stable between 2 to 3 per cent while trying to maintain full employment.<\/p>\n
In March, the RBA lifted the cash rate by a further 25 basis points from 3.85 to 4.1 per cent, back to where it was in April 2025.<\/p>\n
The central bank has now increased interest rates in back-to-back meetings by 50 basis points.<\/p>\n
While stubbornly high domestic inflation was the main driving force behind the RBA lifting the cash rate, they did mention the nation\u2019s labour market remains tight. <\/p>\n
\u201cLabour market conditions were assessed to have tightened a little further relative to the level consistent with full employment, notwithstanding an easing in growth in unit labour costs,\u201d the RBA board said in its minutes from the March meeting.<\/p>\n
\u201cForward-looking indicators suggested that the labour market was likely to remain resilient in the near term.\u201d<\/p>\n
Despite the grim warning, Mr Pickering said February felt like a lifetime ago with the economic and geopolitical situation completely changing due to the start of the US\/Israel and Iran conflict at the end of that month. <\/p>\n
\u201cThe economic outlook has soured in recent weeks, but inflationary pressures have picked up,\u201d he said.<\/p>\n
\u201cThe RBA was already hiking before the conflict in the Middle East began due to what was at the time primarily a domestically-driven surge in inflation.<\/p>\n
\u201cThe current situation is more complicated. Monetary policy isn\u2019t the best way to address a supply-side shock and hiking rates won\u2019t have any meaningful impact on fuel prices, outside of impacting the exchange rate.\u201d<\/p>\n