Unemployment continued to creep higher in September, pulling ahead of the RBA’s forecasts and potentially giving them some cover to hold rates in November.
For September 2026:
👷🏻 Unemployment rate was 4.72% (⬆️ 0.07%) 👷🏻 Employment fell by 39,300 👷🏻 Unemployed people rose 8,900 to 732,000 👷🏻 Participation rate was 66.8% (⬇️ 0.2%)
This is a really bad print. While last month the unemployment rate rose off the back of more people entering the workforce, this month’s increase is from less people finding employment. A concurrent fall in both the participation rate and the number of people employed is never a good sign.
While there is reason to be cautious with this print, as it’s influenced by an adverse change in sample rotations, the trend since January is pretty clear, with unemployment up 0.6% since the start of the year.
For the RBA, there is still the significant CPI print to come later this month, but unemployment racing ahead of their forecasts does give them some breathing room to hold rates in November. This contrasts with the RBA’s worry that weak productivity has pushed up the unemployment rate needed to keep inflation stable. The RBA may decide that 4.7% isn’t high enough.