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The latest Labour Force figures released by the Australian Bureau of Statistics (ABS) have revealed the seasonally adjusted unemployment rate rose by 0.1 percentage point to 4.1 per cent in January.
Australia’s unemployment rate has largely hovered around the narrow range of 3.9–4.1 per cent for the last 12 months, reflecting the oft-described “resilient” labour market despite economic pressures.
Employment rose by 44,000 people and the number of unemployed people increased by 23,000 during January, while the participation rate increased by 0.1 percentage point to a new record high of 67.3 per cent, sitting 0.8 percentage points higher than a year ago and 1.8 percentage points higher than March 2020.
Bjorn Jarvis, ABS head of labour statistics, said: “The number of employed people grew by 0.3 per cent in January 2025, the same pace as the average monthly rise in 2024, but higher than the average monthly population growth of 0.2 per cent during 2024.
“Most of the rise in both employment and unemployment in January reflected rises for women, with female employment rising by 44,000 and unemployment by 24,000. In contrast, male employment, and unemployment both changed by less than 1,000 people.
“As in the past three Januarys, in January 2025 we again saw more people than usual who had a job but were waiting to start or return to work.”
ANZ senior economist Adelaide Timbrell said employment was “higher than expected”, but “has not contributed to labour market tightening, with participation reaching a record high of 67.3 per cent after being revised up to 67.2 per cent in December”.
“The RBA emphasised upside risks to the labour market in its post-meeting statement earlier this week, but this week’s data do not add to these risks,” Timbrell said.
Krishna Bhimavarapu, APAC economist at State Street Global Advisors, said: “The labour market surprised again to the upside despite the participation rate hitting an all-time high.
“However, with the RBA admitting that they may have ‘misjudged’ the excess demand in the labour market, it is unlikely that this data would affect the easing outlook on the cash rate. We still expect two more cuts this year taking the rate to 3.60 per cent.”
Belinda Allen, CBA senior economist, said the wages data from earlier in the week along with the Labour Force print does not alter their view that the next rate cut will be delivered in the May monetary policy meeting.
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