Australia’s jobless rate has ticked up to 4.3% in February. Pushing interest rates to 4.1% to contain an inflation rate that could reach about 5% this year aims to cool prices but risks slowing hiring and stretching already pressured households.
Right now more Australians are either working or looking for work, with the participation rate rising to 66.9% from 66.7% in just one month as everyday costs climb and people seek extra income or delay leaving the workforce. The jobs market has been remarkably resilient since the pandemic, but the combination of stubborn inflation, higher fuel costs linked to conflict in the Middle East and tighter monetary policy is steadily changing the balance between job seekers and available roles.
The economy added close to 49,000 jobs in February, yet the headline number hides a shift in job quality. Part-time roles jumped by about 79,000 while full-time positions fell by around 30,000, and more people aged 65 and over are moving into or staying in part-time work instead of retiring. Labour market specialists suggest this may reflect both a long-term trend of older Australians working longer and the more immediate reality that higher prices are forcing people to stay in the labour force to maintain living standards, even as the official unemployment rate rises because more people are actively looking for work.
Looking ahead, the jobless rate looks set to drift higher towards about 4.6% over the next few years as the central bank prioritises bringing inflation back to its 2-3% target, and this gentle rise in unemployment seems more likely to come from slower job creation than mass layoffs. Treasury projections indicate that if oil stays around $US100 a barrel for the first half of the year, economic growth may ease only slightly to about 2%. A scenario where oil hits $US120 and remains elevated for years could leave gross domestic product around 0.6% lower by 2027, which shows how global conflicts and energy prices can quietly erode growth and job prospects even when headline unemployment still looks relatively low.
