AU: labour force
Date: Thursday, 21 May at 11.30am AEST
Last month, the March employment data delivered a softer‑than‑expected gain of 17,900 jobs, missing the roughly 20,000 consensus forecast, following an upwardly revised 49,600 increase in February. At the same time, the unemployment rate held steady at 4.3%, with the participation rate easing slightly to 66.8% from 66.9%.
Overall, this print marked a cooling from recent stronger gains but still aligned with the Reserve Bank of Australia (RBA)’s assessment in its May statement on monetary policy that labour‑market conditions remain ‘somewhat tight’ relative to full employment.
The unemployment rate has stayed around 4.3% for the past 10 months, broadly in line with the central bank’s near‑term forecasts, even as higher interest rates and cost‑of‑living pressures begin to weigh on demand. The RBA continues to watch for signs that this tightness could feed into wage growth and inflation, particularly amid the added upside risks from energy prices.
Looking ahead to the April update, expectations point to an employment gain of around 20,000, with the jobless rate anticipated to hold steady at 4.3%. Any result that confirms ongoing labour‑market resilience, particularly if full‑time jobs continue to hold up, will keep the RBA’s focus squarely on wage pressures and lingering inflation risks, supporting the case for further tightening of monetary policy. Conversely, a materially softer outcome, especially one that sees the unemployment rate tick higher toward 4.5%, would underscore easing capacity pressures and significantly dial back expectations for further tightening later in the year.
As it stands, the Australian interest‑rate market is set to finish the week pricing in approximately 5 bp of rate hikes for the next RBA board meeting in June. Looking further out, there is a cumulative 36 bp of tightening priced in for the remainder of 2026.