We received a relatively weak labour market report for April, but one soft print in a noisy series doesn't change the bigger picture. Inflation is still the main game and the RBA needs to keep pushing hard on the brake.
For April 2026.
📉 Employment fell 18,600
📉 Unemployment rate was up to 4.5% (up 0.2pts)
📉 Both Full-time and part time employment fell (down 10,700 and 7,900)
📉 The participation rate dipped to 66.7% (down 0.1pts)
⏰ Hours worked rose 0.8% (up 15.8 million hours) despite the fall in employment
Before we get too excited about this print, it's important to remember that the April survey window overlapped with Easter, which I was always going to add a lot of volatility. The ABS also noted an incoming WA rotation group with an elevated unemployment rate. Bottom line, this is one noisy print in a very volatile series. We need to see several months of data before drawing any conclusions about a trend.
It's important to also step back and remember , 4.5% unemployment is low by historical standards. We spent most of the 2010s with unemployment in the 5s and 6s. The labour market remains tight, and that tightness is feeding directly into the inflation problem.
We are already seeing a push for wage increases of 6% and above this cycle. The RBA's job right now is to bring inflation back under control and re-anchor expectations before they spiral further. Headline CPI is at 4.6% and inflation expectations are at 6.6%. Those numbers are far more dangerous than a small uptick in unemployment. History shows us runaway inflation is exceedingly expensive to get under control.
With upward pressure on fuel prices baked in for at least the next couple of months and the flow-on effects that will have on other prices, the RBA cannot afford to be complacent and needs to hold the line with another increase in June.