Job market loses steam after months of red-hot growth
Employment growth fell short of forecasts while unemployment has held steady at 4.1 per cent.
The labour market cooled down last month with employment growth coming in below estimates and the unemployment rate holding at 4.1 per cent.
The latest data from the Australian Bureau of Statistics (ABS) showed the economy added 16,000 jobs in October, well below the 25,000 projected by economists, and marking a three-quarter decrease from September.
Of the jobs added, 10,000 were full-time positions, and 6,000 were part-time.
The participation rate also fell from its record high to 67.1 per cent, down from 67.2 per cent in September.
Head of labour statistics Bjorn Jarvis said the jobs market was the slowest it had been in months.
“While employment grew in October, the 0.1 per cent increase was the slowest growth in recent months,” he said.
“This was lower than each of the previous six months when employment rose by an average of 0.3 per cent per month.”
“With population growth in October outpacing the small rise in employment and unemployment, the participation rate fell slightly to 67.1 per cent, while the employment-to-population ratio remained at the historical high of 64.4 per cent.”
Despite the slowing growth, the unemployment rate was unchanged and remained steady at 4.1 per cent for the third month in a row.
The underemployment rate also fell by 0.1 percentage point to 6.2 per cent, 0.2 percentage points lower than in October 2023, and 2.5 percentage points lower than in March 2020.
The underutilisation rate, which combines the unemployment and underemployment rates, remained at 10.4 per cent in October 2024 and well below the 13.9 per cent recorded in March 2020.
AMP economist My Bui said the labour market was still very resilient amid an extended period of restrictive rates.
“The overall picture remains quite strong as the unemployment rate is still quite low at 4.1 per cent and the jobs figure is also only missing expectations this month after a long period of strong growth,” Bui said.
“Some leading indicators on the labour market remains weaker than the headline, such as surveys on businesses’ hiring plans, posted job advertisements, or the number of job vacancies.”
BDO economics partner Anders Magnusson expected the RBA to continue its approach of holding the cash rate at 4.35 per cent despite signs the labour market was slowing down.
“A rate hold is all but guaranteed for the RBA's last cash rate call of the year,” Magnusson said.
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