Australia's Jobs Boom: Unemployment Plunges to 4.1% in December Surprise Surge

With employment up by 65,200 people—far exceeding economists' expectations of roughly 30,000—Australia's labour market in December 2025 showed a strong recovery. This quick recovery emphasizes the volatility of the industry, as it followed November's lowered loss of around 28,700 jobs. With a gain of 54,800, full-time employment led the charge; 10,400 part-time jobs rounded up total employment to an all-time high of 14.684 million. Monthly hours worked also reached an all-time high of over 2 billion, highlighting strong workforce involvement.

The seasonally adjusted unemployment rate dropped to 4.1% from 4.3%, the lowest level since May 2025 and contrary to expectations of a rise to 4.4%. Driven mostly by more workforce entry among 15–24-year-olds, the participation rate climbed slightly to 66.7%. While underemployment dropped to 5.7%, male employment increased by 49,000, outpacing female gains of 17,000. Released by the Australian Bureau of Statistics on January 22, 2026, the data indicates increased labour market resilience under general economic stress.

This impressive performance has increased conjecture about a possible Reserve Bank of Australia rate increase in the following months as tougher conditions could cause inflation concerns. Treasury forecasts, however, call for a more gradual path ahead with unemployment predicted to rise slowly toward 4.5% by end-2026 and annual employment growth moderating to 1.25% in 2025/26 before edging up to 1.5% in 2026/27. The December surge offers a bullish counterpoint to recent weakness, hence boosting trust in the basic strength of the economy.