The Australian Bureau of Statistics reported that the September unemployment rate rose to 4.7 %, the highest level since October 2021. The increase was driven by a 39,000 drop in employment and a 9,000 rise in the number of unemployed, bringing the total out of work to 732,000 people.
New South Wales accounted for most of the deterioration, with its jobless rate jumping 0.4 percentage points to 4.7 % and 35,000 jobs shed during the month. Victoria and South Australia, by contrast, saw unemployment ease.
The rise in unemployment would have been even larger were it not for a 0.2 percentage point drop in the participation rate, which kept the headline figure from climbing higher.
This has sparked concerns among economists that potential interest‑rate hikes by the Reserve Bank to combat inflation could further impact employment.
The labour market data immediately influenced market expectations. The Australian dollar fell almost a quarter of a cent against the US dollar as traders bet that the Reserve Bank of Australia may not raise interest rates much further.
Buyers in New South Wales are increasingly abandoning houses in favour of apartments, amid the Reserve Bank of Australia's September rate rise. https://t.co/nWHcSHqwY3
Oxford Economics Australia economist Oscar Guth said the data confirms the softening in the jobs market and gives the RBA more room to be patient and assess incoming inflation data before raising rates again. He added that this is consistent with his view that a further rate hike will come in the first quarter of next year.
The figures pre‑date the Reserve Bank’s most recent move at the end of the month, when it pushed the official cash rate to a 15‑year high of 4.6 %.
Because the unemployment rate has reached a five‑year high of 4.7 %, the Reserve Bank is under pressure to pause interest‑rate hikes. The Australian Bureau of Statistics also reported a 39,000 drop in jobs and a 9,000 increase in the number of unemployed, which contributed to a fall in the employment‑to‑population ratio and a decline in the Australian dollar.
Economists expect the Reserve Bank to be more patient before raising rates again, with the next hike likely in the first quarter of next year.
The unemployment rate in Australia has reached 4.7 percent, the highest in five years, due to job losses and a cooling labour market. This has sparked concerns among economists that potential interest‑rate hikes by the Reserve Bank to combat inflation could further impact employment. Despite those concerns, some analysts expect the Reserve Bank to raise rates in November.
Underlying the headline numbers, the Bureau recorded 39,300 job losses overall, alongside a 34,400 increase in full‑time employment and a 73,700 decrease in part‑time employment.
The 0.2 percentage point decline in the participation rate helped keep the unemployment figure from rising even higher, illustrating how shifts in labour‑force attachment can affect the headline statistic.
The Reserve Bank’s official cash rate now stands at 4.6 %, a level not seen for 15 years.
The Australian Bureau of Statistics released the September employment figures on 2022‑09‑01. The Reserve Bank of Australia raised the official cash rate to 4.6 % on 2022‑09‑30. Multiple reports note that the unemployment rate rises to 4.7 percent on 2026‑10‑15, reaching that level and hitting it on the same date.
Anthony Malouf observed, "This is the last labour market print before the RBA’s November meeting. If the RBA does raise rates, we expect it this side of the year, most likely in November, but we think the weight has shifted towards inflation."
Russel Chesler said, "Even though the unemployment rate has increased slightly to 4.7 percent, inflation will be the primary factor that the RBA will be looking at when deciding whether to increase rates."
Sean Crick noted, "This September a higher proportion of people remained unemployed compared to recent years."
With unemployment at a five‑year high, the Australian dollar weaker, and markets pricing in a possible pause, the Reserve Bank faces a balancing act between controlling inflation and supporting a labour market that shows signs of strain. The incoming inflation data will be closely watched as the bank decides whether to hold rates steady or move toward another increase.