Australia’s Labor Market Cools as Unemployment Rises to 4.5%, Sparking Rate Cut Bets
Australia’s labor market showed signs of weakening as unemployment climbed to 4.5% in September, marking the highest level since late 2021. Employment growth fell short of expectations, with a modest 14,900 increase compared to forecasts of 20,000. The participation rate edged up to 67%, suggesting more Australians are actively seeking work amid softening demand.
The shift toward part-time employment, which offset a decline in full-time jobs, signals underlying economic fragility. Analysts attribute the cooling trend to the cumulative impact of elevated interest rates, currently at 3.6%, finally weighing on business activity.
Financial markets reacted swiftly, with Australian three-year government bond yields plunging 11 basis points—the sharpest single-day drop since May. The Australian dollar weakened by 0.5% as traders priced in growing expectations for central bank rate cuts by November.
