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The Australian Bureau of Statistics (ABS) has revealed the unemployment rate remained at 4.1 per cent (seasonally adjusted) over February 2025 in its latest Labour Force figures.
The number of employed people fell by 52,800 – a higher-than-expected drop – while the number of unemployed people dropped by 11,200 over the month, resulting in the rate being unchanged.
According to ABS head of labour statistics, Bjorn Jarvis, fewer older workers returning to work during the month contributed to the large fall in employment, along with lower levels of employment in older age groups in February 2025 when compared to the same time last year.
“This follows higher levels of employment in these age groups in recent years, particularly in 2024, alongside growth in the employment-to-population ratio over the last few years,” Jarvis said.
“In contrast, we continue to see growth in employment for people aged between 15 and 54 over the year.”
However, despite the fall in employment, the seasonally adjusted figures were still 266,000 people, 1.9 per cent higher than February 2024, with an annual growth rate sitting around the 20-year pre-pandemic average of 2 per cent.
Jarvis said: “While the employment-to-population ratio fell 0.4 percentage points to 64.1 per cent in February, it is still only 0.4 points below its historical high in December, and around where it was in June 2024.”
Krishna Bhimavarapu, APAC economist at State Street Global Advisors, said these latest figures reminded us “that the idiosyncrasies in the labour market remain in play despite the general agreement on its strength”.
“The big drop in employment growth makes us wonder if seasonality played a part,” Bhimavarapu said.
“We do not think this data will lead to any material softening in the RBA’s stance but, the fact that employment of those aged 55 or above declined in five of the last seven months warrants some caution.”
Commenting on the implications this dataset will have for the RBA, Callam Pickering, APAC economist at global job site Indeed, said: “The market continues to price in a high likelihood of a rate cut by July and we think a cut in either May or July is still likely.
“The Reserve Bank is unlikely to be too concerned about the February labour force figures. Certainly, a decline in employment is undesirable, but the labour market remains incredibly tight.
“Another weaker outcome in March, however, would certainly give them a lot to think about.
“The decision on whether to cut or not though will ultimately come down to the next set of quarterly inflation figures, released at the end of April. Every other data release feels secondary at the moment, including the labour force survey.”
ANZ economists Aaron Luk and Adam Boyton held a similar sentiment to Pickering: “We don’t think this print in isolation will have a material impact on the RBA’s monetary policy decisions moving forward.
“Labour market fundamentals remain solid, with an overall robust trend in employment growth, a low unemployment rate and an elevated level of job advertisements.
“We maintain our stance that this easing cycle will be a shallow one, with only one more rate cut to come in August.”
[RELATED: Unemployment rate barely budges in January]
