Australia’s unemployment rate remains steady at 4.2 per cent in August, despite more than 5,000 jobs being lost last month.<\/p>\n
“What’s becoming evident is that the labour market is no longer proving able to find jobs for all that want them, leading to a further lift in the unemployment rate to 4.5 per cent.<\/p>\n
“This rate is in line with the Reserve Bank’s base case view of full employment in Australia, so the bank from today could no longer characterise the labour market as ‘tight’.”<\/p>\n
Data show that the number of officially unemployed people rose by 33,900 in September, and the number of those employed rose by 14,900, with the size of the labour force growing by 48,800 people.<\/p>\n
That increase in the labour force saw the participation rate lift by 0.1 percentage points to 67 per cent, back to where it was in July.<\/p>\n
In trend terms, which smooths out seasonal noise from the data, the unemployment rate remained steady at 4.3 per cent.<\/p>\n
Slowdown in employment growth<\/p>\n
Callam Pickering, Asia Pacific economist at global job site Indeed, said employment growth was no longer keeping pace with the growth in Australia’s working age population.<\/p>\n
He said until that changed, the unemployment rate would drift higher.<\/p>\n
His graphic below shows how much employment growth has slowed down in 2025, compared to last year.<\/p>\n
<\/p>\n
Employment growth in Australia has slowed down noticeably this year, compared to 2023 and 2024. (Source: Callam Pickering, Asia Pacific economist at global job site Indeed)<\/p>\n
“Labour market conditions continue to cool, with the slowdown in employment growth finally triggering higher unemployment,” Mr Pickering said.<\/p>\n
“The Reserve Bank would be foolish not to cut rates when they meet in November.<\/p>\n
“After adding another 14,900 people in September, employment has increased by just 116,000 people over the first nine months of the year. That compares to a gain of 323,000 people over the same period last year.”<\/p>\n
Buyers warned as national home values climb<\/a><\/p>\n Home values have gained for the eighth month in a row. Experts warn that a rush of first home buyers signing up to the Home Guarantee Scheme will only fuel price growth.\u00a0<\/p>\n However, Mr Pickering said most forward-looking measures of labour demand, such as ANZ-Indeed Job Ads, or the ABS’s Job Vacancies, remained quite positive.<\/p>\n Job vacancies are jobs waiting to be filled, so a high number of vacancies typically indicates strong future employment growth.<\/p>\n He said there was “a bit of a disconnect” between the “mediocre employment gains and ongoing strength in vacancies” at the moment, so while recent employment figures had been disappointing, there was still some “potential upside”.<\/p>\n “At the very least, though, the RBA will have little choice but to revise up its unemployment rate forecasts when they release their next Statement on Monetary Policy in November,” Mr Pickering said.<\/p>\n “Their existing forecast, of an unemployment rate at 4.3 per cent by year end, has proved too optimistic.”<\/p>\n When the RBA released its official forecasts in November last year<\/a>, it forecast the unemployment rate to hit 4.5 per cent by the end of 2025.<\/p>\n However, earlier this year the RBA readjusted its forecasts downwards because the unemployment rate was not rising as it had been expecting.<\/p>\n In its most recent official forecasts, from August this year<\/a>, the RBA was forecasting the unemployment rate to be 4.3 per cent by the end of this year.<\/p>\n So its forecasts from November last year may have been closer to the mark.<\/p>\n RBA anticipated slowdown in employment<\/p>\n The minutes of the recent RBA board meeting were released on Tuesday<\/a>.<\/p>\n In the minutes, board members discussed how the “composition” of employment growth was evolving in Australia this year and why it was contributing to the slowdown in employment growth.<\/p>\n