Australia Unemployment Hits Five-Year High of 4.7 Percent

Australian employment unexpectedly fell by 39,300 in September, according to data from the Australian Bureau of Statistics. This decline pushed the national unemployment rate to 4.7 percent, a five-year high that exceeded analyst forecasts of a 20,000 job increase and surpassed the Reserve Bank of Australia's own forecast of 4.5 percent for the December quarter.

Regional disparities were evident in the data, with Victoria reporting the highest state unemployment rate at 5.1 percent, while South Australia and Western Australia recorded the lowest at 4.2 percent. Although full-time positions grew by 34,400, the national participation rate fell to 66.8 percent, reflecting a gradual easing of the labor market driven by higher interest rates and weak consumer confidence.

The Reserve Bank of Australia has raised interest rates four times in 2026 to a cash rate of 4.60 percent to combat inflation, which reached 4.0 percent in August. Governor Michele Bullock stated that further rate hikes remain possible "if that's what's needed to get inflation down," despite noting that she does not like the idea of job losses. The softer labor market data may reduce immediate pressure for further hikes, but the bank remains focused on returning inflation to its 2 percent to 3 percent target band.