We received a slightly misleading labour force report for February. While headline unemployment was up, the report was pretty much all good news:
For February 2026:
🧑🏻🚒 Headline unemployed was up to 4.3%.
🧑🏻🚒 Participation was up to 66.9%
🧑🏻🚒 48,900 more Australians found jobs.
🧑🏻🚒 Underemployment stayed flat at 5.9%
The increase in the headline unemployment rate was entirely a case of the denominator growing faster than the numerator. While the economy added 48,900 new jobs (a very strong result) but was unable to absorb all of the 83,900 people that joined the labour force. Both of these stats are good signs, we want both more people in work, and a higher proportion of the population participating in the labour force.
It’s also encouraging that while total hours work fell (noting it was a short month), the underemployment rate remained steady.
What this does represent is a small loosening of the labour market. While one print doesn't mean much on its own, we will see over the next few months if the market can soak up the extra workers, or if we start to see a trend toward labour supply materially exceeding demand.