Jobless rate holds at 4.1pc, Bullock warns market still too tight Michael ReadEconomics correspondent
The unemployment rate held steady at 4.1 per cent for a third straight month in October, and Reserve Bank of Australia governor Michele Bullock warned the jobs market remained tight despite a gradual slowdown in hiring.
About 15,900 people found work last month while an extra 8300 people became unemployed, the Australian Bureau of Statistics said on Thursday.
The figures were weaker than market expectations for employment gains of 25,000, but followed a bumper month in September when more than 61,000 people found work.
With the unemployment rate still at exceptionally low levels, and the share of people either with a job or looking for work at a near-record 67.1 per cent, the jobs market remains tight relative to history.
Ms Bullock has cited the strength of the jobs market as one of the reasons she cannot rule out delivering a 14th interest rate rise, despite almost every other advanced economy central bank moving to cut rates.
Speaking shortly before the release of the jobs figures, Ms Bullock on Thursday said the economy was still operating a level that could not be sustained without fuelling inflation.
“We still see that in our surveys, in our liaison, that businesses are still saying labour market tightness has eased, but it’s still not easy to get staff,” Ms Bullock told an event hosted by the Australian Securities and Investments Commission.
“The strength in the jobs market is reflecting two things, I think. It’s still reflecting the strength that we’ve seen in demand … and population growth has been the other thing that’s been driving it.”
Markets are not fully priced for the RBA to cut the cash rate until September 2025, well after the federal election, which must be held by May 2025.
While the unemployment rate has gradually risen since mid-2022, the RBA still assesses that it is tight relative to historical standards, operating above so-called “full employment” and a source of inflationary pressures.
Economists have attributed the steady rise in the participation rate since the pandemic to the ongoing influx of migrants and ample employment opportunities luring disengaged locals back into the labour force.
While net overseas migration is starting to cool in response to the Albanese government’s efforts to stem the flow of foreign students, arrivals remain high relative to history.
The rapid rise in the size of the workforce has caused the unemployment rate to rise from a multi-decade low of 3.5 per cent in 2022, even though the share of existing workers losing their job stands at a near-record low.
Employment gains of at least 39,000 are needed each month to stop unemployment from rising, based on the current elevated rate of migration, assuming the participation rate stays unchanged.
Last month’s employment gains were driven by a 9700 increase in full-time workers and a 6200 rise in part-time employment.
About 70 per cent of all employment growth over the past year was in the so-called “non-market sector”, which includes the government-funded industries of education, health and the public service.
Private sector employers, by contrast, have gradually eased back on hiring workers.
The number of job openings has declined by one-quarter since mid-2022, although there are still far more vacancies than before the pandemic, ABS figures show.
The RBA expects the pull-back in hiring to cause the jobless rate to gradually drift higher, as entrants to the workforce struggle to find work quickly.
