Unemployment holds at 4.7 per cent as jobs fall in September

The Australian Bureau of Statistics (ABS) reported on 15 October 2026 that employment fell by 39,300 people in September, and the seasonally adjusted unemployment rate was 4.7 per cent. August's rate was revised up to the same level, so unemployment has now been at 4.7 per cent for two months, its highest in five years, Reuters reported.

Employment fell, led by part-time jobs

The ABS figures show 14,782,700 people employed in September, down 0.3 per cent on August. The fall came from part-time work, which dropped by 73,700. Full-time employment rose by 34,400. Reuters reported that analysts had expected a gain of about 20,000 jobs, and that the fall was the largest in a single month since February 2025.

The number of unemployed people rose by 8,900 to 732,000. The participation rate, the share of the population working or looking for work, eased by 0.2 percentage points to 66.8 per cent. The underemployment rate, which counts people with a job who would like more hours, rose to 6.3 per cent. Total hours worked edged up by 0.1 per cent.

For comparison, the ABS reported an unemployment rate of 4.5 per cent in September 2025. The trend unemployment rate, which smooths out month to month swings, was 4.6 per cent this September.

Monthly figures can move around

The ABS is part way through modernising the Labour Force survey, and it has changed some questions. It says this lowers comparability with earlier months during the transition. For September it also adjusted the influence of about 1,400 respondents in Victoria, around 2.8 per cent of the sample, in one group of survey respondents.

The ABS said its quality checks found the September figures fit for use, and it advises caution with short term changes, suggesting the trend series for the underlying direction. The Reserve Bank of Australia (RBA) has also cautioned against reading too much into a single month, Reuters noted.

Unemployment has reached the level the RBA expected for late 2027

In its August 2026 Statement on Monetary Policy, the RBA forecast the unemployment rate rising gradually, to 4.5 per cent by December 2026 and 4.7 per cent by December 2027. September's figure has reached that later level more than a year early. The same forecasts saw trimmed mean inflation, a measure of underlying inflation, easing from 3.6 per cent in June 2026 to 2.6 per cent by December 2027.

Inflation remains above the RBA's target band of 2 to 3 per cent. The ABS reported on 30 September that annual inflation was 4.0 per cent in the twelve months to August, with trimmed mean inflation at 3.6 per cent. The RBA lifted the cash rate to 4.60 per cent from 30 September, its fourth increase this year.

A softer labour market and high inflation pull in different directions for the RBA. Economists at Moody's Analytics told Reuters that firms appear to be cutting shifts and casual hours first while keeping full-time staff. Economists at State Street Investment Management said the bar for an immediate rise had gone up, while further increases were not ruled out.

Markets now see a pause in November as more likely

After the figures, traders priced a chance of about 90 per cent that the RBA will hold the cash rate at 4.60 per cent on 3 November, up from 66 per cent before the release, Reuters reported. The chance they priced for a rise by December fell to about 32 per cent. Three year bond futures rose to a five week high, meaning short term government bond yields fell, and the Australian dollar eased to about 69.5 US cents.

AMP's economists said in their weekly update of 16 October that they expect the RBA to hold in November with a firm message on inflation. The S&P/ASX 200 index closed the week slightly higher, at 8,806.7 points on 16 October, ABC News reported.

The next pieces of information are close together. The RBA Deputy Governor is due to appear at a conference in Sydney on 21 October, the ABS releases the September consumer price index on 28 October, and the RBA announces its decision at 2.30 pm on 3 November. The full September figures are on the ABS website.

Savings and investments respond to rates in different ways

Expectations about rates can move quickly with each new release. Variable rates on cash accounts can change when the cash rate does, while a term deposit fixes its rate for the term. Bond prices move as yields change, and a bond held to maturity repays its face value if the issuer pays. We arrange high interest cash accounts, term deposits, bonds and managed funds, and your adviser can look at how a mix of them fits when you need your money and the income you would like from it.

If you would like to talk about what the latest jobs figures and the rate outlook could mean for your savings, investments or borrowing, please get in touch with your adviser.

This article is general information only. It does not take into account your objectives, financial situation or needs, and it is not a recommendation to buy, sell or hold any investment. Figures are as published on the dates given. Past performance is not a reliable indicator of future performance. Read the full risk warning