Nearly 40,000 Jobs Shed in Australia in September

By James Glynn

SYDNEY--Nearly 40,000 jobs in Australia were shed in September, taking some of the pressure off the Reserve Bank of Australian to raise interest rates further in November.

Employment fell by 39,300 in September, the Australian Bureau of Statistics said Thursday. That was much worse than the increase of around 15,000 jobs tipped by a Wall Street Journal poll of economists. Part-time employment slumped by 73,700 while full-time employment grew by 34,400, the ABS said.

Unemployment in September was 4.7%, the ABS said, unchanged from a revised 4.7% the month before, which marked a post-pandemic high. The WSJ poll had tipped the jobless rate to be 4.6%.

The participation rate, a measure of the total workforce, fell to 66.8% in September from 67.0% in August.

"Firms are cutting shifts and casual hours first while holding onto full-time staff, a pattern typical of an early hiring downturn," said Sunny Nguyen, head of Australia economics at Moody's Analytics in a note. "The pullback in participation likely includes discouraged workers, so the headline rate may understate the slack now building."

The rise in unemployment is consistent with recent messaging by the RBA that demand across the economy needs to slow in order to return inflation to the target rate of around 2.5%.

Inflation is currently running at 4.0% on year, despite the RBA announcing four interest rate increase since this year alone.

Still, money market traders are likely to continue to price in a strong probability that the RBA will tighten policy further in November, given recent indications that the bank is prepared to suffer some pain in the labor market in order to address the recent upward drift in inflation.

The unresolved war in the Middle East is deeply concerning central bank policy makers, as is the pace of an investment boom in the artificial intelligence sector. All that is occurring at a time of chronically weak productivity growth.

The RBA will also be weighing growing fears that the economy could stall if its taps the brakes further, with interest already at their highest level in 15 years.

A further increase in the official cash rate could raise mortgage repayments as a proportion of household incomes to their highest levels since the late 1980s, according to some economists.

The underemployment rate rose 0.1 percentage points to 6.3% in September, the ABS said.

-- Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

October 14, 2026 21:35 ET (01:35 GMT)