Unemployment increases to 4.3%

The seasonally adjusted unemployment rate increased to 4.3 per cent, the ABS has said.

The Australian Bureau of Statistics (ABS) has released the latest seasonally adjusted employment figures, which show that the unemployment rate has risen to 4.3 per cent, having dropped to 4.1 per cent earlier this year, and holding steady at that level in February.

The news follows the Reserve Bank’s decision, earlier this week, to increase the cash rate by 25 basis points for the second time in a row, taking the rate to 4.1 per cent.

Speaking about the data, ABS head of labour statistics Sean Crick said: “The number of unemployed people grew by 35,000, contributing to the 0.2 percentage point increase of the unemployment rate in February.

“This month, we saw fewer people who were unemployed and waiting to start a job in January move into employment in February, compared to recent Februarys.

“We also saw more people remaining unemployed this month compared to recent Februarys.”

Employed people grew by 49,000, the ABS reported, while part-time employment rose by 79,000 people and full-time employment fell by 30,000 people.

“This month, we saw more people move into part-time employment, particularly those aged 65 and over,” Crick said.

“Additionally, this month we saw that fewer people are leaving jobs to retire compared to a year ago.”

Elsewhere, hours worked fell 0.2 per cent in the past month, with more people working part-time hours rather than full-time.

The growth in both employment and unemployment has resulted in a 0.2 percentage point increase to the participation rate, which was 66.9 per cent in February, the ABS noted.

The data also showed that the trend unemployment rate dropped to 4.2 per cent.

“The trend unemployment rate fell marginally from a revised 4.3 per cent in January to 4.2 per cent in February,” Crick said.

“Trend employment grew by 0.2 per cent while hours worked grew by 0.3 per cent in February. Annually, hours worked also grew faster than employment.”

In response to the data, Employment Hero APAC managing director James Keene said looking at the full picture is pertinent in understanding what the increased rate of unemployment actually means for the health of labour market.

“The 49,000 jobs added last month, combined with a participation rate climbing to 66.9 per cent shows Australians are actively seeking and finding work. However, the most notable shift is the 'flexibility pivot' we are seeing in our real-time data. Across the 350,000 businesses on our platform, casual employment has surged 9.4 per cent year-on-year, while full-time growth is less than half of that,” he said.

“This isn't businesses pulling back; it's a structural shift. Employers are intentionally building flexibility into their workforce strategies to keep doors open while navigating an uncertain economy.”

According to Employment Hero’s Jobs Report data, which tracks verified payroll data for 1.5 million employees, Keene went on, “the market is actually accelerating in key areas”.

“SME hiring is up 6.8 per cent year-on-year, with construction, engineering, and agriculture leading the charge. We anticipate this velocity will only increase as AI removes the traditional friction of employment,” he said.

“On our platform, HeroAI and our Recruitment Agent has enabled candidates to land roles in as little as three days. By reducing screening time by 70 per cent, this AI technology is shortening the hiring cycle by weeks. This compressed timeline is exactly what enables participation to stay high even as the broader economy shifts.”

“And, because our data looks at actual money moving through payroll, instead of surveys, we see these shifts before they show up in official statistics. For instance, we can see that wages are still growing at 5.3 per cent annually, consistently running ahead of headline inflation,” he concluded.