Unemployment hits 4.6%, testing RBA's rate-hike logic
Unemployment climbed to 4.6% in August, the highest since November 2021, above the Reserve Bank's own forecast.
Australia's jobless rate jumped to 4.6% in August, contradicting the Reserve Bank's expectation that its interest rate rises would gradually ease the labour market. The RBA raised the cash rate to 4.6% in September with all nine board members voting in favour, a more emphatic decision than many economists expected.
The labour market is sending mixed signals. Unemployment rose, but largely because more people started looking for work.
The participation rate hit an almost-record-high of 67.1%. Job creation and job ads have stayed relatively solid, but business hiring intentions are weakening.
The RBA's September meeting minutes, due Tuesday, will show whether board members discussed the gap between rising joblessness and their decision to keep tightening.
- 4.6%
- August unemployment rate
- November 2021
- Highest since
- 4.5%
- RBA forecast for December quarter
- 67.1%
- Participation rate
Why it mattersThe jobless rate rose faster than the RBA forecast. Governor Michele Bullock said the labour market was still tight, but the data suggests interest rate rises aren't working as the central bank expected.
AustraliaHigher unemployment and uncertainty about future rate moves affect Australian households already facing rising costs and mortgage stress.
✓ Claims checked against the source and corrected before publish. checked 1 h ago
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