Key Points:

  • Australian employment rose by 64,100 people in September, continuing recent strong gains, to be up by around 435,000 over the past year. 
  • Australia’s unemployment rate eased slightly to 4.1%, reaching its lowest level since May, with broader measures of labour market underutilisation also down. 
  • Australia’s participation rate rose further to 67.2%, establishing a new record high. 

Australian employment rose 64,100 people in September — well above market expectations — with the unemployment rate easing slightly to 4.1%. 

Australian employment continues to surge higher, driven by strong job creation across most sectors. Forward-looking indicators of labour demand — such as job vacancies and Indeed job postings — suggest that job creation in the near-term will remain strong. That’s helped the nation absorb the impacts of cost-of-living pressures and other economic challenges.

Australian employment increased by around 435,000 people over the past year and by around 267,000 people in the past six months. That sort of employment growth was unheard of before the pandemic and remains quite remarkable given Australia’s otherwise anemic economic performance. Full-time employment accounts for almost 60% of annual employment growth and two-thirds of growth over the past six months.

Bar graph titled “Change in Australian employment”. With a vertical axis ranging from -800,000 to 1,200,000, Australian employment rose by 434,900 people over the past year, remaining high by historical standards. 
Bar graph titled “Change in Australian employment”. With a vertical axis ranging from -800,000 to 1,200,000, Australian employment rose by 434,900 people over the past year, remaining high by historical standards. 

Australia’s unemployment rate eases slightly

Australia’s unemployment rate declined by 0.1 percentage points, to 4.1%, falling to its lowest level since May. The underemployment rate — which includes people who have a job but want more hours — also eased to 6.3% in September (from 6.5% a month earlier), leaving Australia’s underutilisation rate at 10.4%, its best result since March. All three measures remain well below pre-pandemic levels and comparable to labour market conditions in the boom years before the global financial crisis.

Line graph titled “Australian unemployment measures.” With a vertical axis ranging from 0 to 25%, Australia’s main unemployment and underemployment measures remain low by historical standards and well below pre-pandemic levels. 
Line graph titled “Australian unemployment measures.” With a vertical axis ranging from 0 to 25%, Australia’s main unemployment and underemployment measures remain low by historical standards and well below pre-pandemic levels. 

Another month, another record for Australia’s labour force participation rate

In September, Australia’s participation rate reached 67.2% and has increased by 0.7 percentage points over the past year. Plenty of job opportunities, the nation’s cost-of-living crisis and older workers remaining in the workforce longer than in the past have led to rising workforce participation in recent years.

Whether rising participation in the workforce is a positive or negative economic development depends largely on what drives it. In recent decades, rising participation among women has reflected a more inclusive working environment and greater emphasis on work-life balance. Whereas the recent increase, perhaps due to cost-of-living pressures, perhaps reflects concerns around a person or household’s financial livelihood. It will be interesting to see whether workforce participation softens as cost-of-living pressures subside. 

Line graph titled “Australian labour force participation rate”. With a vertical axis ranging from 60 to 68%, Australia’s participation rate reached a record high of 67.2% in September and is well above pre-pandemic levels.
Line graph titled “Australian labour force participation rate”. With a vertical axis ranging from 60 to 68%, Australia’s participation rate reached a record high of 67.2% in September and is well above pre-pandemic levels.

Assessment and implications

Australia’s labour market remains incredibly tight and is proving highly resilient. The unemployment rate is low, employment growth is strong and forward-looking measures of labour demand remain solid. This was a jobs report that was close to flawless, but it’s also a jobs report that feels at odds with Australia’s anemic economic performance. It’s hard to imagine that dynamic — strong employment growth and dreadful economic growth — being maintained for long.