Australia's Unemployment Rate Holds at 4.1% Despite Employment Drop
Australia's unemployment rate remained steady at 4.1 percent in May despite a monthly employment decline of 2,000 people, the Australian Bureau of Statistics reported Thursday.
The stable jobless rate reflected a concurrent 3,000-person drop in unemployment numbers, offsetting the employment decrease and maintaining the rate unchanged for the third consecutive month, according to seasonally adjusted data released by the national statistics agency.
"Despite employment falling by 2,000 people this month, it's up 2.3 percent compared to May 2024, which is stronger than the pre-pandemic, 10-year average annual growth of 1.7 percent," said Sean Crick, ABS head of labour statistics.
The employment data showed resilience in Australia's labor market amid broader economic uncertainties, with annual employment growth exceeding historical averages. The May survey period ran from May 4 to May 17.
Australia's employment-to-population ratio declined 0.1 percentage points to 64.2 percent, while the participation rate also fell 0.1 percentage points to 67.0 percent. However, female workforce participation reached a milestone during the month.
"Despite the slight fall in the employment-to-population ratio this month, the female employment-to-population ratio rose 0.1 percentage points to a record high of 60.9 percent," Crick said.
The record female employment rate represents a significant shift in Australia's workforce composition, highlighting ongoing trends toward greater gender parity in employment opportunities across various sectors.
Hours worked surged 1.3 percent in May, rebounding from reduced levels in preceding months that coincided with Easter holiday disruptions and severe weather events. The increase suggests businesses returned to normal operations following the seasonal and weather-related interruptions that affected productivity earlier in the year.
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Underemployment Shows Continued Improvement
The underemployment rate, measuring workers seeking additional hours, decreased 0.1 percentage points to 5.9 percent in May. This marked a 0.8 percentage point improvement from May 2024 and a substantial 2.8 percentage point decline from March 2020 pre-pandemic levels.
The broader underutilisation rate, combining unemployment and underemployment figures, fell 0.2 percentage points to 9.9 percent. This measure has dropped 4.0 percentage points since March 2020, indicating significant recovery in workforce capacity utilization since the pandemic's onset.
Trend data revealed underlying stability in key employment metrics. The trend unemployment rate maintained 4.1 percent for three consecutive months, while employment grew approximately 28,000 people or 0.2 percent in May.
"In trend terms, the employment-to-population ratio remained at 64.3 percent in May, while the participation rate stayed at 67.0 percent. Both measures have remained the same since the start of 2025," Crick said.
The consistency in trend measurements suggests Australia's labor market has reached a stable equilibrium following post-pandemic adjustments. Monthly hours worked increased 0.1 percent, continuing a pattern of modest growth that has remained smaller than monthly employment growth throughout 2025.
Regional Data Forthcoming
The ABS indicated more comprehensive information, including regional labor market breakdowns, will be available in the detailed May 2025 Labour Force report scheduled for release Thursday, May 26.
The upcoming detailed report typically provides state-by-state employment figures, industry-specific data, and demographic breakdowns that offer deeper insights into regional economic conditions across Australia's diverse geographic and economic landscape.
Australia's civilian population aged 15 years and older serves as the basis for all labor force calculations, according to ABS methodology. The agency defines pre-pandemic conditions as March 2020 when conducting comparative analysis of current employment trends.
The May employment data comes as Australia continues navigating global economic headwinds, including international inflation pressures and supply chain uncertainties that have affected various sectors of the domestic economy.
Financial markets have closely watched Australian employment figures as indicators of the Reserve Bank of Australia's potential monetary policy adjustments. The central bank has maintained focus on employment trends as key indicators of economic health and inflation pressures.
The stable unemployment rate occurs against a backdrop of ongoing workforce challenges across multiple industries, including skills shortages in healthcare, construction, and technology sectors that have persisted despite overall employment growth.
Australia's labor force participation has generally remained robust compared to many developed economies, reflecting the country's resource-driven economic foundation and diverse industrial base that has provided employment opportunities across skill levels.
The ABS acknowledged continued public cooperation in survey participation, thanking Australians for their responses that enable accurate labor market monitoring. The June survey period runs from June 1 to June 14, with results expected in subsequent monthly releases.
The employment figures contribute to broader economic indicators that policymakers and business leaders use to assess Australia's economic trajectory and make strategic decisions regarding investment, hiring, and operational planning across various sectors.
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