Australia Unemployment Hits Five-Year High Despite Job Growth

Australia's unemployment rate rose to 4.6 per cent in August, the highest level since November 2021, according to data from the Australian Bureau of Statistics. While the economy added 39,500 jobs—surpassing economist forecasts of 21,500 and rebounding from July losses—the unemployment rate climbed because the labor force expanded faster than employment. The participation rate reached a near-record 67.1 per cent.

Employment growth was driven exclusively by part-time work, which increased by approximately 46,000 positions, while full-time employment fell by roughly 6,000. Officials attributed the part-time surge partly to the hiring of 30,000 temporary workers for the 2026 census. Despite these shifts, total hours worked increased by 0.7 per cent and the underemployment rate improved to 6.2 per cent.

Reserve Bank of Australia Governor Michele Bullock indicated that the labor market remains tight and suggested an unemployment rate between 4.5 per cent and 5 per cent is necessary to curb inflation. This has led markets to expect a fourth interest rate hike at the board meeting on September 29. Government officials, including Employment Minister Amanda Rishworth and Acting Treasurer Katy Gallagher, defended the market as resilient, noting that over 1.3 million jobs have been created since May 2022.