Australian employment figures released on Thursday by the Australian Bureau of Statistics showed a drop of 39,300 in the number of people holding jobs during September, driving the headline jobless rate up to 4.7 per cent. The federal statistics agency also revised August’s preliminary figure of 4.6 per cent upward to 4.7 per cent.
Job Losses and Surging Unemployment Across the Australian Labor Market
The participation rate edged downward to 66.8 per cent, while the employment-to-population ratio slipped 0.3 percentage points to 63.6 per cent. At 732,000 individuals, the tally of unemployed job seekers reached its highest mark since April 2021.
This month there were 39,000 less employed people and 9000 more unemployed people.
Sean Crick, head of labour statistics at the Australian Bureau of Statistics, via Nine
The cooling labor market followed earlier monetary tightening.
New South Wales Bears the Brunt of Regional Employment Declines
The contraction in jobs hit the nation’s largest employment market with particular severity. New South Wales lost 44,200 jobs since June, driven largely by a drop in male employment. Full-time positions in the state fell by 32,600, while the rest of the country added nearly 80,000 positions over the same timeframe.
Unemployment in New South Wales climbed 0.4 percentage points in September to reach 4.7 per cent, rising from 4 per cent in June. The state’s property market slowdown contributed to an 18 per cent jump in unemployed residents—totaling 34,300 additional people looking for work since June.
Regional experiences diverged across the country. While New South Wales struggled, other states recorded employment gains between June and September:.
Queensland added 5,200 positions.
Victoria added 10,000 positions.
Western Australia added 11,500 positions.
Economic Analysts Weigh In on Reserve Bank Policy and Inflation Pressures
Financial markets reacted swiftly to the weaker labor data. The Australian dollar dropped nearly a quarter of a cent against its US counterpart as traders scaled back expectations for further monetary tightening. Futures pricing showed the perceived chance of a rate increase at the central bank’s November meeting fell from nearly one in three down to roughly one in 10, while December hike probabilities dropped below 50 per cent.
Photo: Nine.com.au
Economists suggested the softened labor market provides breathing room for monetary policymakers.
The 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.
Photo: finance.yahoo.com
Oscar Guth, economist at Oxford Economics Australia, via The Sydney Morning Herald
Westpac economist Ryan Wells cautioned that tightening financial conditions could place further strain on households and businesses.
The economy faces more challenges in the near term as another round of disruptions in global energy markets combines with further interest rate rises and a deepening housing downturn.
Ryan Wells, economist at Westpac, via The Sydney Morning Herald
With the September jobless rate now sitting above the central bank’s end-of-year forecast of 4.5 per cent, Oxford Economics Australia anticipates national unemployment will continue climbing through 2027, eventually exceeding 4.8 per cent late in the year as the lagged impacts of monetary policy and oil price shocks filter through the economy.
