The April Australian unemployment rate is seen holding at 4.1%. This kind of stability is great to see and speaks to the strength of the current labor market as we continue into the second quarter of 2025. This figure has remained consistent since April 2024, indicating a period of relative stability in employment levels. Then, in November 2024, the rate fell to 3.9%. It then shot up to 4.1% in January 2025, illustrating the temporary nature of those seasonal employment increases that typically occur.
The Australian Bureau of Statistics (ABS) will release the April employment report first thing on Thursday morning. This report will provide a clear picture of the valuable today’s job market. Analysts are forecasting Australia will add 19,000 jobs in the month. This comes on the heels of another vigorous wave of 32,200 jobs created in March. This expansion created 15,000 full-time and 17,200 part-time positions. More importantly, it underscores the intensity of demand for workers across nearly every sector.
Stability Amidst Fluctuations
Unemployment has proven remarkably resilient in Australia over the last year, hovering around 4%. At the same time, holding unemployment steady, the April forecast depicts a more severe drop in unemployment levels. This trend has alleviated worries for both policymakers and economists. With recent measures of labour underutilisation still at near-historically-low levels despite some weakening in employment numbers over February.
“Labour market conditions remain tight. Despite a decline in employment in February, measures of labour underutilisation are at relatively low rates and business surveys and liaison suggest that availability of labour is still a constraint for a range of employers,” – RBA officials.
In their latest commentary, the Reserve Bank of Australia (RBA) notes that wage pressures have relaxed a bit. We haven’t yet seen a meaningful turnaround in productivity growth. In view of the implication of these shifts, growth in unit labour costs remains very high. The RBA remains cautious, focusing on ensuring that inflation returns to the midpoint of its target band sustainably.
Job Creation Trends
This strong continued job creation in Australia is a sign of an economy that is dynamically responding to a shift in demand and growing overall. The 20,000 net new jobs added in April is a small step forward at the start of the second quarter. This increase builds on an unbelievable jump in the numbers from March. The country recently added more than 32,000 new jobs, a sign of the robust rebound from the economic devastation caused by COVID-19 and other recent upheavals.
Employers are still challenged by persistent labour shortages. This means that the need for skilled workers has outpaced supply across a variety of fields. Labor force participation rate will continue to hold at 66.8%. That means more people are employed—which is great—or they’re looking for work.
“Further AUD/USD gains are likely, but will depend on the market’s sentiment, rather than on employment data, particularly if the figures result within expectations,” – Valeria Bednarik.
This sentiment reflects a broader trend observed in business surveys that indicate an ongoing constraint regarding the availability of suitable candidates for job openings.
Implications for Monetary Policy
Neither the unemployment rate nor the figures on job creation are likely to change much. This stability is expected to have a muted impact on the RBA’s monetary policy outlook. The central bank will probably continue to take a wait-and-see approach as it waits for signs of persistent inflation and broader economic growth. First, inflation has fallen considerably from its high in 2022. So far, this sharp reduction has produced a favorable shift in the balance of aggregate demand and supply.
“Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance,” – RBA officials.
Even with these rosy signs, RBA bigwigs continue to keep focus to be sure that current inflation trends are targeted long-term. As always, they voice prudent hope tempered with recognition of clear dangers, especially from external shocks that might affect the overall health of the economy.