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Australia’s job market is softening, with August employment falling by 5,400—its weakest in six months. Full-time job losses, nearly 41,000, were concentrated in NSW, while Victoria saw the largest gains.
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Unemployment held steady at 4.2% due to a lower participation rate but is projected to drift to 4.5% over the next six to nine months. The employment-to-population ratio and net job gains have also declined, signalling labour market weakness.
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Recruiters report employers becoming more selective, matching recent “hard” data confirming reduced hiring momentum.
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The RBA is not expected to cut rates this month, preferring to await inflation data, but a rate cut is likely in November. The US Federal Reserve, battling faster-rising inflation and a sharper jobs slowdown, has started cutting rates, signalling more aggressive easing ahead.
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The differing US and Australian outlooks have pushed the Australian dollar to a 2025 high as global and local policy diverge.
KEY STATISTICS
• Unemployment rate increased to 4.3% in trend terms¹
• Employment increased by 18,100 people (0.1%) to 14,643,000¹
• Participation rate remained at 66.9%¹
• Full-time employment increased by 12,100 to 10,101,800 people¹
• Part-time employment increased by 6,000 to 4,541,200 people¹
MARKET ANALYSIS
• Economy shed jobs but fewer people looking for work²
• Data supports cautious Reserve Bank of Australia stance²
• Employment growth remains modest despite population increases
POLICY IMPLICATIONS
□ Unemployment rate may not rise much further as full employment threshold has fallen³
□ Wages growth expected to slow, benefiting inflation control³
□ Data supports potential RBA rate cutting cycle³
OUTLOOK
• Monthly employment fluctuations continue within broader stable trend
• Labour market demonstrates resilience despite economic headwinds
• 818,900 part-time workers preferred more hours¹
¹ Australian Bureau of Statistics – Labour Force Data ² Bloomberg – Australian Unemployment Analysis ³ AMP Economic Insights
