The unemployment rate has risen to 4.3 per cent. Photo: George Tsotsos.
Australia’s unemployment rate has risen to 4.3 per cent after it was tipped to remain at 4.1 per cent.
It marks the highest unemployment rate since November 2021 and adds to speculation of a rate cut next month.
The dollar fell back to below 65 US cents in response to employment figures, while the local share market slightly increased its gains.
Seasonally adjusted figures released on Thursday (17 July) showed the unemployment rate rose to 4.3 per cent in June.
The Australian Bureau of Statistics (ABS) data reveals employment rose by a lower than anticipated 2000 people for the month, following a fall of 1000 in May. It’s up 2.0 per cent compared to June 2024.
Part-time employment grew by 40,000 people, offset by a 38,000-person fall in full-time employment.
The employment-to-population ratio remained at 64.2 per cent; the participation rate rose to 67.1 per cent.
Hours worked fell 0.9 per cent in June, following a rise of 1.4 per cent in May.
The Federal Government insists while the month’s result shows a softening, the underlying labour market remains resilient.
“Today’s figures show some slight softening in the labour market, but more jobs were created, unemployment remains low and participation remains close to its record high,” Employment Minister Amanda Rishworth said.
ABS head of labour statistics Sean Crick said the 0.2 per cent unemployment rate rise in June was driven by a 34,000 increase in the number of unemployed people.
“This month we saw a decrease in full-time hours worked, down 1.3 per cent, associated with a 0.4 per cent fall in full-time employees,” he said.
The underemployment rate rose by 0.1 percentage points to 6.0 per cent in June 2025. This was 0.4 per cent lower than June 2024 and 2.7 per cent lower than March 2020.
The underutilisation rate, which combines the unemployment and underemployment rates, rose by 0.3 percentage points to 10.3 per cent. This was 0.1 per cent lower than June 2024 and 3.6 per cent lower than March 2020.
“The trend unemployment rate has risen to 4.2 per cent after remaining at 4.1 per cent over the previous three months,” Mr Crick said.
“In trend terms, the employment-to-population ratio remained at 64.2 per cent in June, while the participation rate stayed at 67.0 per cent.
“Both measures have remained largely unchanged since the start of 2025.”
Employment grew 0.2 per cent to about 23,000 people in June and 2.1 per cent over the last 12 months.
Monthly hours worked rose by 0.1 per cent, which has consistently been smaller than monthly employment growth since the start of 2025.
The underemployment rate remained at 5.9 per cent and the underutilisation rate remained at 10.1 per cent.
The higher-than-expected unemployment data gives weight to the argument the Reserve Bank of Australia (RBA) will cut the official interest rate at its next board meeting in August.
Against expectations, the RBA kept interest rates unchanged at 3.85 per cent this month (July).
The central bank was widely anticipated to further cut the rate to 3.60 per cent but erred on the side of caution, citing international uncertainty and slow business recovery on the domestic front for its decision.
The decision was split for the first time; the RBA Board voting six to three in favour of keeping the rate steady.
RBA Governor Michele Bullock said the bank had noted volatility in the monthly Consumer Price Index.
“The board decided to wait a few weeks to confirm we’re still on track to meet our inflation expectation,” she said.
Original Article published by Chris Johnson on Region Canberra.
