Australian Unemployment Rate Slides to 3.9 Percent

Some economists speculate that the RBA may not be in a hurry to cut rates based on these figures.

Commuters make their way through Martin Place Metro Station in Sydney, Australia, on Aug. 19, 2024. Lisa Maree Williams/Getty Images

Australia’s unemployment rate dropped to 3.9 percent from 4.1 percent in November, data from the Australian Bureau of Statistics (ABS) reveals.

ABS labour statistics head David Taylor said a higher-than-usual number of people moved into employment in November.

“With employment rising by 36,000 people and the number of unemployed decreasing by 27,000 people, the unemployment rate fell to 3.9 percent,” he said.

Meanwhile, the participation rate fell slightly to 67 percent in November, down from a historic high of 67.1 percent in September.

“Despite the fall, the participation rate was the same as a year ago, and 1.5 percentage points higher than March 2020,” Taylor said.

The employment-to-population ratio saw a small increase of 0.1 percent in seasonally adjusted terms to 64.4 percent in November.

“The recent growth in population has boosted the labour supply as employment has kept up with population growth,” Taylor said.

On the other hand, underemployment rates also slid to 6.1 percent in November, down by 0.1 percent on a month ago.

Treasurer and Economists Respond

Treasurer Jim Chalmers linked the result to the Labor government’s economic policies.

“Today’s new jobs numbers show unemployment is falling while wages are rising, inflation is moderating, and our policies are helping achieve a soft landing in our economy,” he said on social media.

Meanwhile, IFM Investors’ Chief Economist Alex Joiner suggested that the Reserve Bank of Australia (RBA) may not need to cut interest rates quickly based on the figures.

“Solid employment growth in November and a tick down in the participation rate sees the unemployment rate get back down below 4 percent (at 3.9 percent),” he said. 

“It seems the RBA doesn’t particularly need to be in a hurry to cut rates; a February move still has a lot of optionalities.”

Lower unemployment can lead to speculation about interest rates due to more people being employed, which generally spurs inflation.

Meanwhile, ANZ senior economist Adelaide Timbrell said the unemployment rate had fallen below 4 percent for the first time since March.

“We expect the first rate cut to occur in May 2025. Softer economic data from the recent national accounts release raised the risk of a February cut, but this labour market result offsets that risk somewhat,” she said in a research note.

However, while speaking about the broader economy on Dec. 11, Shadow Treasurer Angus Taylor said Labor’s economic management had delivered Australians the worst collapse in living standards on record.

The economy has come to a grinding halt, productivity is in free fall, GDP per capita has gone backwards for a record seven consecutive quarters, and interest rates have risen 12 times since Labor were elected,” he said in a statement.

Recent figures revealed that public sector employees rose in every state between 2023 and 2024.