Employment growth slows as jobless rate holds steady

A worker holds a slow sign outside a job site (file image)
An easing in the monthly job creation figures is seen as a sign the economy is slowing. -AAP Image

Australian job creation has undershot expectations for the first time in several months. 

Figures compiled by Australian Bureau of Statistics show a 15,900 employment increase in October, falling short of the 25,000 gain pencilled in by forecasters.

The result halted a run of above-expectations job creation, with economists continually surprised by the scale of employment growth under an economy experiencing elevated inflation and higher interest rates.

Elsewhere in Thursday's numbers were signs of labour market resilience, including the unemployment rate, which clung on at 4.1 per cent for a third month in a row.

"With employment rising by around 16,000 people and the number of unemployed up by around 8,000, the unemployment rate remained at 4.1 per cent," ABS head of labour statistics Bjorn Jarvis said.

The jobless rate was now 0.6 percentage points above its low of 3.5 per cent in mid-2023, Mr Jarvis highlighted.

Yet it was still 1.1 percentage points below the March 2020 rate, in the early stages of the COVID-19 pandemic.

Of the 15,900 jobs created in October, 9,700 were full-time and 6,200 part-time.

"With employment rising by around 16,000 people and the number of unemployed up by around 8,000, the unemployment rate remained at 4.1 per cent," Bjorn Jarvis, ABS head of labour statistics— Australian Bureau of Statistics (@ABSStats) For more, see https://t.co/am1Njhycgb pic.twitter.com/vHnIjpUQ7uNovember 14, 2024

Oxford Economics Australia head of macroeconomic forecasting Sean Langcake said the labour market remained in a tight position overall.

"We expect the market will slacken as we move into 2025, but the timing and magnitude of this easing remains highly uncertain," he said.

"Forward indicators of labour demand are still resilient, which will keep some momentum in the labour market - and upward pressure on inflation - for the time being."

IG market analyst Tony Sycamore said the softer jobs growth offered some modest indications of cooling after an extended period of exceeding expectations.

"While it seems improbable that this slowdown will push the unemployment rate to the RBA's forecast of 4.3 per cent by December, it provides the central bank with the breathing room to maintain its focus on inflation and keep rates in restrictive territory into year-end, all without any significant signs of deterioration in the labour market," he said.

The job figures follow a softer-than-expected wage report on Wednesday.

The annual pace of wage growth took a sizeable step down to 3.5 per cent in September, from 4.1 per cent over the year to June.