Australia's jobless rate hits a five-year high of 4.6% ahead of an expected RBA hike
The Australian Bureau of Statistics on Thursday, September 24, 2026 said August unemployment rose to 4.6% as employment increased 39,500 and participation climbed to 67.1%.
Australia's seasonally adjusted unemployment rate rose to a five-year high of 4.6% in August, the Australian Bureau of Statistics reported Thursday. The Reserve Bank of Australia is expected to raise interest rates next week.
The labour force grew by 67,700 people in the month, of which 39,500 found work and 28,200 were counted as unemployed, taking the jobless total to 722,900. Sean Crick, the ABS head of labour statistics, said August recorded a higher proportion of people who had been outside the labour force moving into unemployment than in recent years. Participation rose 0.2 percentage point to 67.1%. The jobs that were added were part-time: full-time employment fell by 6,000 people while part-time employment rose by 46,000. The 4.6% rate was above a forecast for an unchanged 4.5%; the employment gain compared with a 20,000 consensus.
That 4.6% sits inside a range Governor Michele Bullock named this week as the jobless rate that would take pressure off inflation. On Friday, September 18, she told parliament that "Inflation is too high" and that, although growth is slowing, "some of these upside risks to inflation appear to be materialising." On Tuesday, September 22, at a Committee for Economic Development of Australia event in Sydney, she said unemployment "between 4.5 and 5 will probably take enough heat out of the labour market that it'll ease pressure on inflation." The cash-rate target remains 4.35% after 75 basis points of increases this year. The Monetary Policy Board meets Monday and Tuesday, September 28-29, with the decision due Tuesday.
Reuters said markets implied a 95% probability of a fourth increase, to 4.60%, after the release. The spot Australian dollar slipped 0.3% to US$0.7018 in Sydney trading. A US-listed fund of Australian shares, EWA, was up 0.16% at $28.41 as of 9:56 a.m. ET Thursday.
For the August print to change Tuesday's decision, the board would have to read 4.6% as enough cooling to hold. Priced at 95% for a rise to 4.60%, that is not the market's reading.
Frequently asked
Does a five-year-high jobless rate stop the RBA from hiking?
Markets implied a 95% probability of a fourth increase to 4.60% after the release, so that is not the market's reading.
If unemployment rose, why did employment go up too?
The labour force grew by 67,700 people, of which 39,500 found work and 28,200 were counted as unemployed, with participation up 0.2 percentage point to 67.1%.
What kind of jobs were added?
Full-time employment fell by 6,000 people while part-time employment rose by 46,000.
When does the RBA decide?
The Monetary Policy Board meets Monday and Tuesday, September 28-29, with the decision due Tuesday.