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The number of people without a job in NSW has jumped by 34,000 in three months and the unemployment rate has reached a five-year high as rising interest rates, elevated petrol prices and falling house prices sap demand for employment across the state.<\/p>\n
The NSW unemployment rate hit 4.7 per cent last month, the worst since November 2021 when the state economy was recovering from the disruptions of the pandemic lockdowns. The figures expose the vulnerability of the state economy amid persistent cost of living pressures, sluggish growth and uncertainty about the stability of global financial markets<\/a>.<\/p>\n The number of people looking for work in NSW reached 223,000, also the highest since the COVID-19 crisis, figures from the Australian Bureau of Statistics show.<\/p>\n If not for a fall in the labour force participation rate \u2013 the share of people in work or looking for work \u2013 last month\u2019s jobless rate in NSW would have been higher.<\/p>\n The Reserve Bank raised interest rates in February, March and May and the latest figures show demand for employment in NSW has deteriorated sharply following those hikes: since June, the state\u2019s unemployment rate has climbed from 4 per cent to 4.7 per cent.<\/p>\n Households and businesses have also been hit by rising fuel prices caused by conflict in the Middle East and falling property prices; home values in Sydney have dropped 8.6 per cent from their February peak<\/a>, Cotality data shows.<\/p>\n The number of employed people in NSW last month was the lowest since January, meaning most of the jobs added during the first half of the year have since been lost.<\/p>\n<\/p>\n KPMG urban economist Terry Rawnsley said the rise in unemployment reflected the economic headwinds buffeting NSW.<\/p>\n \u201cWe\u2019ve had interest rate increases, we\u2019ve got the fuel price shock working through the system, which is feeding into cost of living pressures, so all these factors have taken a bit of steam out of the NSW labour market,\u201d he said.<\/p>\n \u201cUnfortunately, that does mean many people are not finding the hours they\u2019re looking for, or not finding the jobs they\u2019re looking for.\u201d<\/p>\n Full-time male employment in NSW has been hit especially hard \u2013 since June the number of men in the state with a full-time job has fallen by more than 31,000.<\/p>\n The figures pre-date the Reserve Bank\u2019s most recent interest rate<\/a> increase at the end of last month when it lifted the official cash rate to a 15-year high of 4.6 per cent. That move threatens to further sap demand for workers in NSW.<\/p>\n The weaker employment conditions in NSW helped lift the national unemployment rate to a near five-year high of 4.7 per cent in September. Employment in Australia fell by 39,000 in the month.<\/p>\n The rise in unemployment in September has also reduced the chances of another interest rate rise this year.<\/p>\n Before the figures were released, financial markets had put the chance of a rate rise at the Reserve Bank\u2019s November meeting at almost one in three. That dropped to about one in 10 after the weak result, while the chance of a rate rise in December fell to less than 50 per cent.<\/p>\n The Australian dollar also fell almost a quarter of a cent against its US counterpart on expectations that rates may not climb much higher in Australia.<\/p>\n Analysis by state Treasury, published in the June budget, showed the NSW economy is more sensitive to interest rate increases than other states.<\/p>\n \u201cThe sensitivity arises from the higher level of house prices and the resulting larger mortgage payment burden relative to income for NSW households, which amplifies the effects of higher interest rates on disposable incomes, consumption, and housing market conditions,\u201d the budget papers said.<\/p>\n Related Article In the March quarter of 2026, the average new housing loan for owner occupiers in NSW was $860,000, 28 per cent more than in Victoria.<\/p>\n The September jobs figures show the state\u2019s unemployment rate is now higher than forecast in the June budget which predicted the jobless rate would be 4.5 per cent in 2026-27.<\/p>\n The NSW unemployment rate was consistently better than the national figure during the first half of this year, but the persistent economic headwinds have changed that. The lowest unemployment rate among the states in September was in South Australia and Western Australia, at 4.2 per cent, followed by Queensland with 4.5 per cent.<\/p>\n Oxford Economics Australia economist Oscar Guth said the figures confirmed the overall softening in the nation\u2019s jobs market which had become evident over recent months.<\/p>\n \u201cThe rise in the unemployment rate to 4.7 per cent gives the RBA more room to be patient and assess incoming inflation data before raising rates again. This is consistent with our view that a further rate hike will come in the first quarter of next year,\u201d he said.<\/p>\n Start the day with a summary of the day\u2019s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter<\/a>.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n Remove items from your saved list<\/a> to add more.<\/p>\n No gift articles left<\/p>\n You’ve used all of your gift articles. 3 more will become available on the 1st of every month.<\/p>\n Close![\"Unemployment](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/45ff132755bda038d5cce7b192b2fb46bbd4d114.jpeg\")
Unemployment in NSW has reached a five-year high.Louie Douvis.<\/p>\n![\"Unemployment](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/1792055082_289_25f2169adbf44632919c4ac13a952ce752c8b9d6.jpeg\")
<\/a><\/p>\n![\"Matt](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/1792055085_178_25611a2557110140db195f09bab958d41123ba0d1fd3aea47f7432f64621ef20.png\")
Matt Wade<\/a> is a senior economics writer at The Sydney Morning Herald.Connect via X<\/a> or email<\/a>.![\"Shane](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/10\/1792055086_772_057daa8f1b51682d1d002d4c2720328233762dc5.png\")
Shane Wright<\/a> is a senior economics correspondent for The Sydney Morning Herald and The Age.Connect via X<\/a> or email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Updated October 15, 2026 \u2014 6:28pm,first published 4:12pm Save You have reached your maximum number of saved items.…\n","protected":false},"author":2,"featured_media":928862,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-928861","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/928861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=928861"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/928861\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/928862"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=928861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=928861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=928861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}