📈Unemployment in Australia - April 2025 📈

In April, the Australian Bureau of Statistics (ABS) announced a slight increase in the national unemployment rate, rising from 4.0% to 4.1% in March 2025. This figure came in below the market forecast of 4.2%, occurring against a backdrop of worsening global economic conditions and geopolitical turmoil. However, seasonally adjusted unemployment remained at 4.0%.

The rise in unemployment can be partially attributed to slowed domestic economic growth, recorded at 1.3% annually in Q4 2024. This subdued growth below the target range of 3-4% represents decreased aggregate demand for goods and services. Consequently, as labour is a derived demand, the demand for workers has declined, contributing to the uptick in unemployment.

A 0.5 percentage point decline in Australia’s labour force participation rate over the past two months has masked the full extent of soft employment growth; had participation held at its January level, the unemployment rate would have risen more sharply to 4.7%. Despite the headline increase, some labour market indicators remain positive, with the underemployment rate (5.9%) recovering from the highs of 13.6% during COVID-19, reaching the lowest level since August 2008.

This trend aligns with Australia bracing for global economic turmoil, influenced by sporadic policy changes from the Trump administration. The implementation and subsequent adjustments of blanket tariffs, including 10% on Australian goods and significantly higher rates (145-245%) on Chinese imports, disrupt global supply chains and create uncertainty impacting global consumer confidence and domestic economic conditions.

Although headline unemployment edged increased to 4.1%, it remains within the estimates of full employment. However, with the participation rate slipping and global risks escalating, particularly amid renewed tariff aggression from the Trump administration, labour market resilience could be tested further in coming quarters, necessitating fiscal and monetary policy response.

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Image source: ABC