Unemployment is on the rise Down Under, a possible sign that the economy is starting to soften, and a potential brake on near-term interest rate hikes.
The latest jobs report, which was released by the Australian Bureau of Statistics (ABS) on Thursday, showed that the unemployment rate rose in April to 4.5%, up from 4.3% in March, in seasonally-adjusted terms.
The national participation rate, in seasonally-adjusted terms, continued its downward trend, falling to 66.7 in April, down from 66.8% in March, and 66.9% in February.
By state, Tasmania had the highest unemployment rate in seasonally-adjusted terms at 5%, followed by 4.8% in Victoria. Western Australia had the lowest unemployment levels at 4.1%, followed by Queensland and South Australia, which both had unemployment rates of 4.2%. New South Wales' unemployment rate was on par with the national average at 4.5%.
The nation's jobs report offers the latest glimpse into where interest rates may be heading.
Mortgage holders and investors nationwide have been under mounting pressure with higher interest rates. The Reserve Bank of Australia (RBA) has delivered three back-to-back rate hikes so far in 2026, taking the official cash rate (OCR) to 4.35%. And with inflation still elevated and global uncertainty persisting, further increases remain on the table.
Drivers include tensions in the Middle East and ongoing inflationary pressures. The RBA has been steadfast that it is working to keep the inflationary rate between 2% and 3%.
But inflation has yet to show signs of slowing since the start of the year. The latest consumer price index (CPI) revealed that both headline CPI and trimmed mean inflation are still elevated, with headline CPI surging to 4.6% in the year ending in February, and trimmed mean at 3.3%, both above the RBA's target range.
The conflict in the Middle East, which escalated in March, has done little to relieve price pressures. In fact, it has added to them, raising fuel and other commodity prices globally, including in Australia.
