Australia’s Labour Market Weakens as November Employment Drops Sharply

Australia’s labour market showed clear signs of cooling in November, with national employment falling by the most in nine months. According to the Australian Bureau of Statistics, total employment declined by 23,100 jobs, reversing October’s strong gain of 41,200 and missing market expectations of a 20,000 increase. The drop was driven largely by a significant loss of 56,500 full-time positions, underscoring softening economic momentum.

Annual job growth slowed to 1.3%, a sharp deceleration from 3.5% earlier in the year and notably below the nation’s 2% population growth. Despite weakening employment conditions, the unemployment rate held steady at 4.3%, defying forecasts for a slight rise. The participation rate eased to 66.7% from 66.9%, while total hours worked remained flat following consecutive months of growth.

Economists noted that some volatility was expected after October’s surge. Harry Murphy Cruise of Oxford Economics highlighted that short-term fluctuations can mask broader labour trends, and the underlying picture points to a gradual cooling of the job market. This softening reduces pressure on the Reserve Bank of Australia (RBA) to implement near-term rate hikes.

Financial markets responded modestly, with the Australian dollar dipping 0.1% to $0.6667 and three-year government bond futures extending gains. Interest rate swaps now reflect a 23% probability of a February rate hike, rising to around 70% by May, with two increases priced in by the end of next year.

The RBA recently kept its cash rate at 3.6%, signalling no immediate policy easing as inflation remains elevated. Headline inflation rose for the fourth consecutive month to 3.8% in October, while trimmed mean inflation reached 3.3%, still above the central bank’s 2%–3% target range. Strong economic growth—its fastest in two years—has been fuelled by government, consumer and business spending, potentially adding to inflationary pressures even as the labour market loosens.