The labour market contraction that I’ve been signalling for the final three months continued in September. The rising unemployment price and the declining employment ranges are all right down to the work of the RBA and its ridiculous rate of interest will increase. Given the lag in rates of interest impacting on the actual economic system, the present labour market outcomes are in all probability reflecting two price hikes in the past and since then the RBA has hiked two additional occasions pursuing their zealous ideological agenda. The scenario will thus worsen as these price hikes lastly begin impacting. In the meantime, the inflation price is being pushed by elements that rising unemployment won’t instantly handle. It actually demonstrates the damaging New Keynesian logic, which is likely one of the worst elements of the neoliberal period. The Australian Bureau of Statistics (ABS) launched the most recent labour power information in the present day (October 15, 2026) – Labour Power, Australia – for September 2026 – which confirmed that the labour market deteriorated additional in September. The outcomes are horrible – a weakening demand-side and the declining participation masking the injury to unemployment. Had the labour power not shrunk the unemployment price would have risen to five per cent somewhat than the official rise of 0.1 level to 4.7 per cent. Thus, each hidden unemployment and official unemployment rose in September. The broad labour underutilisation price (the sum of unemployment and underemployment) rose 0.1 level to 11.0 per cent, which signifies that 11 per cent of the out there and keen workforce shouldn’t be working in a technique or one other and that doesn’t embrace the 55 thousand further employees who left the labour power. The truth makes a farce of the RBA’s claims that the labour market is tight. The RBA is sabotaging the economic system for not acceptable purpose.
The abstract seasonally-adjusted statistics for September 2026 are:
- Employment fell 39.3 thousand (-0.3 per cent).
- Full-time employment rose 34.4 thousand (0.3 per cent).
- Half-time employment fell 73.7 thousand (-1.6 per cent).
- Unemployment rose by 8.9 thousand to 732 thousand individuals
- The unemployment price rose 0.1 level to 4.7 per cent.
- The participation price fell 0.2 factors to 66.8 per cent.
- The Employment-population ratio fell 0.3 factors to 63.6 per cent.
- Month-to-month hours labored rose 1 million (0.1 per cent).
- Underemployment rose 0.1 level to six.3 per cent – rising 14.2 thousand to 981.4 thousand.
- The Broad Labour Underutilisation price (the sum of unemployment and underemployment) rose 0.1 level to 11.0 per cent.
- General, there are 1713.5 thousand individuals both unemployed or underemployed.
The ABS press launch – Unemployment price at 4.7% in September – famous that:
he seasonally adjusted unemployment price was 4.7 per cent in September …
This month there have been 39,000 much less employed individuals and 9,000 extra unemployed individuals …
Because of this, the employment to inhabitants ratio fell 0.3 share factors to 63.6 per cent, and the participation price fell 0.2 share factors to 66.8 per cent …
This September a better proportion of individuals remained unemployed in comparison with latest years …
The underemployment price rose 0.1 share factors to six.3 per cent.
Abstract
1. Complete employment shrinks and the rise in unemployment is moderated by the autumn in participation – in different phrases, because of the shrinking employment alternatives, individuals are giving up wanting and dropping out of the official labour power, which signifies that the official unemployment is changing into hidden unemployment (see express evaluation later).
2. The employment to inhabitants ratio fell considerably which signifies that the demand-side of the labour market is failing to maintain tempo with the underlying inhabitants progress.
3. We are actually seeing clearly the faulty nature of the RBA governor’s latest claims that the labour market remains to be too tight and additional price rises are mandatory.
Employment progress adverse in September
- Employment fell 39.3 thousand (-0.3 per cent).
- Full-time employment rose 34.4 thousand (0.3 per cent).
- Half-time employment fell 73.7 thousand (-1.6 per cent).
The next graph exhibits the expansion in whole, full-time, and part-time employment for the final 24 months.
The next desk exhibits the shifts during the last 6 months which helps to see the underlying pattern.
The Employment-to-Inhabitants ratio supplies a measure of the state of the labour market that’s unbiased of the availability shifts within the labour market (pushed by the shifts within the participation price).
The underlying working age inhabitants grows steadily whereas the labour power shifts with each underlying inhabitants progress and the participation swings.
The next graph exhibits the Employment-Inhabitants ratio fell sharply by 0.3 factors on 63.6 per cent in September.
The subsequent graphs present the typical month-to-month change in whole employment (first graph) and full- and part-time employment (second graph).
For whole employment the month-to-month common modifications had been:
- 2022 – 46 thousand
- 2023 – 30.7 thousand
- 2024 – 30.4 thousand
- 2025 – 12.45 thousand
- 2026 to this point – 213.3 thousand
Month-to-month hours labored rose 1 million (0.1 per cent) in September 2026
The next graph exhibits the expansion in month-to-month hours labored for the final 24 months, with the straight line being a easy linear regression to point pattern.
Unemployment rose by 8.9 thousand to 732 thousand individuals
The unemployment price rose 0.21 level to 4.7 per cent however the rise would have been higher had not the participation price fell by 0.2 factors (see beneath for evaluation).
The next graph exhibits the evolution of the official unemployment price since 1980.
What was the influence of the declining participation price on unemployment in September 2026
Labour power participation fell 0.2 factors in September.
The query is what would the unemployment price have been, given the employment and inhabitants progress in September, if the participation price had not additionally risen?
These ideas assist us reply the sort of query:
- The labour power is a subset of the working-age inhabitants (these above 15 years previous). The proportion of the working-age inhabitants that constitutes the labour power is named the labour power participation price. Thus modifications within the labour power can influence on the official unemployment price, and, in consequence, actions within the latter have to be interpreted fastidiously. A rising unemployment price could not point out a recessing economic system.
- The labour power can develop because of normal inhabitants progress and/or will increase within the labour power participation charges (and vice versa).
The next Desk exhibits the breakdown within the modifications to the principle aggregates (Labour Power, Employment and Unemployment) and the influence of the autumn within the participation price.
The change within the labour power in September 2026 was the end result of two separate elements:
- The underlying inhabitants progress added 23.7 thousand individuals to the labour power. The inhabitants progress influence on the labour power mixture is comparatively regular from month to month; and
- The rise within the participation price meant that there have been 54.1 thousand LESS employees within the labour power (relative to what would have occurred had the participation price remained unchanged).
- The web end result was that the labour power FELL by 30.4 thousand.
Evaluation:
1. If the participation price had not have fallen in September 2026, whole unemployment, given the present employment stage, would have been 786.2 thousand somewhat than the official depend of 732 thousand as recorded by the ABS – a distinction of 54.1 thousand employees (the ‘participation impact’).
2. These employees are categorised as (principally) ‘hidden unemployed’ and permit us to see the deterioration in a broader sense than if we focus solely on the official unemployment price.
2. With out the autumn within the participation price, the official unemployment price would have been 5 per cent somewhat than its present official worth of 4.7 per cent.
Broad labour underutilisation – rises 0.2 factors to 11 per cent in September 2026
- Underemployment rose 0.1 level to six.3 per cent – rising 14.2 thousand to 981.4 thousand.
- The Broad Labour Underutilisation price (the sum of unemployment and underemployment) rose 0.1 level to 11.0 per cent.
- General, there are 1713.5 thousand individuals both unemployed or underemployed.
The next graph exhibits the evolution of underemployment and the Broad labour underutilisation price since 1980.
Teenage labour market deteriorates in September
- Full-time employment rose 2.1 thousand (1.1 per cent).
- Half-time employment fell 20.1 thousand (-3.0 per cent).
- Complete teenage (15-19) employment fell 18 thousand (-2.9 per cent).
The next desk summarises the shifts within the teenage labour marketplace for the month and during the last 12 months.
To place these modifications right into a scale perspective (that’s, relative to measurement of the teenage labour power) the next information reviews the shifts within the Employment-Inhabitants ratio for youngsters.
The Teenage Employment-Inhabitants ratios and their month-to-month modifications in September 2026 had been:
- Males: 45.9 per cent, -1.0 level.
- Females: 53.3 per cent, -1.2 factors.
- Complete: 49.5 per cent, -1.1 factors.
Conclusion
My customary warning to take care in decoding month-to-month labour power modifications – they will fluctuate for a lot of causes and it’s imprudent to leap to conclusions on the again of a single month’s information.
The abstract is:
- Horrible outcomes – weakening demand-side and participation falling masking the injury to unemployment.
- Hidden unemployment and official unemployment rose in September.
- The broad labour underutilisation price (the sum of unemployment and underemployment) rose 0.1 level to 11.0 per cent.
- That’s, 11 per cent of the out there and keen workforce shouldn’t be working in a technique or one other, which doesn’t embrace the 55 thousand further employees who left the labour power.
- And this deterioration displays the influence of round 2 rate of interest hikes in the past – the scenario will worsen given there have been 2 extra price hikes.
- A complete coverage failure.
That’s sufficient for in the present day!
(c) Copyright 2026 William Mitchell. All Rights Reserved.
