It comes despite more than 5,000 jobs being lost last month.(ABC News: Danielle Bonica)
Australia's unemployment rate has remained steady at 4.2 per cent in August, due to a big drop in the proportion of people looking for work.
Australian Bureau of Statistics (ABS) figures show the number of employed people dropped by 5,400 last month, driven by a 40,900 slump in full-time employment.
Hours worked fell 0.4 per cent in August, supported by less people working full-time hours this month, ABS head of labour statistics Sean Crick said.
The unemployment rate would have jumped due to the fall in employed people, but the labour force shrank by more than 22,000 people last month, as some people stopped looking for work.
IG market analyst Tony Sycamore said the simultaneous decline in employment and participation shows Australia's jobs market is weakening faster than expected.
The participation rate, which measures the proportion of the working-age population either employed or actively seeking work, often falls when individuals stop looking for jobs due to perceived lack of opportunities, particularly during economic slowdowns, he noted.
This trend may reflect growing pessimism among job seekers, reinforced by recent high-profile lay-offs in sectors like banking, mining, and education.
There is also a possibility that, as inflation and interest rates have eased, reduced cost-of-living pressures mean some people who did not want to work but had to in order to pay the bills, have dropped back out of the labour force.
Job creation 'running out of steam' as population keeps growing
Employment growth is running out of steam, with headcount little changed from four months ago, said Sean Langcake from Oxford Economics.
The stagnation in job creation is a worrying trend given that Australia's population grew by 1.6 per cent over the year to March, according to separate data from the ABS.
Our population at 31 March 2025 was 27.5 million people, that's 423,400 more than the same time in 2024, noted Beidar Cho, ABS head of demography.
We saw 315,900 people added to our population from overseas migration from March 2024 to March 2025. This compares with 493,800 people in the previous 12 months.
However, Mr Langcake said the so far modest increases in the unemployment rate mean the Reserve Bank is unlikely to be unduly concerned.
We don't think these data are bad enough to spur the RBA into action this month. But another cut in November is expected, he forecast.
The Reserve Bank will announce its next interest rate decision on September 30, with most economists expecting no change.
Markets are pricing in just a 10 per cent chance of a rate cut this month, but around an 86 per cent likelihood of rates falling by 0.25 of a percentage point by November.
https://www.abc.net.au/news/2025-09-18/unemployment-steady-august-2025-abs-labour-force-data/105788046
