Key Points
- The Australian unemployment rate jumped to 4.7%, while the economy shed 39,000 jobs in September.
- However, hours worked rose by 1 million in September, and job ads are recovering.
Australian employment declined by 39,300 jobs in September, according to the latest ABS report. However, the fall did not affect the underlying trend, which increased by 0.1% for the month.
The unemployment rate rose to 4.7%, up from 4.6% in August.
The unemployment increase is partly attributable to a 0.2% decline in the participation rate, to 66.8% from 67.0% in August.
However, the latest RBA minutes noted reservations about labor force updates due to recent changes in methodology:
Members noted that considerable caution is warranted when interpreting the current official labour force data, because of methodological changes to the survey. They discussed how to interpret more forward-looking indicators of labour demand; most indicators pointed to stability in labour market conditions but others (such as some measures of job advertisements) appeared to be strengthening a little. Taken together, the staff’s judgement was that these leading indicators pointed to broadly stable labour market conditions in the near term.
Actual hours worked are less open to interpretation, rising 1 million hours in September and posting an annual growth rate of 1.3%. However, the trend has flattened, reflecting zero growth since January.
On the other hand, ANZ-Indeed Job Ads have grown by 2.0% or more in each of the last three months, reflecting an improvement in some quarters.
Conclusion
We find aggregate monthly hours worked to be the most reliable indicator of the Australian labor market. While September saw an increase of 1 million hours, growth has been flat this year. Minutes of the last RBA board meeting concluded that labor market conditions were broadly stable, and the September jobs report is unlikely to change that view.
Inflation remains above target, and we expect the RBA to keep hiking rates until demand growth slows.
Acknowledgments
- ABS: Labor Report
- Trading Economics: Australian Job Ads
- RBA: Minutes of the Monetary Policy Board Meeting, 28 and 29 September 2026
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
