Key Points:

  • Australian employment rose by 39,700 people in May. Full-time employment rose by 41,700 people, offsetting a modest decline in part-time employment. 
  • Australia’s unemployment rate fell to 4% in May, from 4.1% in April, and remains low by historical standards. 
  • While the national unemployment rate remains low, it has increased noticeably in both New South Wales and Victoria over the past year.

Australia’s labour market recorded yet another month of solid gains in May, despite ongoing cost-of-living pressures and other economic challenges. 

Unlike much of the past year, employment growth in May was driven by gains among full-time workers. Full-time employment increased by 41,700, offsetting a modest decline in part-time employment. But over the past 12 months, full-time employment has accounted for just a quarter of overall employment gains. The Australian economy might be creating an incredible number of jobs, but perhaps not the same quality of jobs that we saw earlier in the pandemic recovery.

Bar graph titled "Change in Australian employment". With a y-axis ranging from 0 to 1 million, we find that recent employment growth has been concentrated in part-time employment, with only a small contribution from full-time.
Bar graph titled “Change in Australian employment”. With a y-axis ranging from 0 to 1 million, we find that recent employment growth has been concentrated in part-time employment, with only a small contribution from full-time.

Measures of unemployment and labour market underutilisation changed little in May. The unemployment rate eased slightly to 4%, with the underemployment rate remaining at 6.7%. That left the underutilisation rate – which includes both unemployment and underemployment – at 10.7%. Measures of unemployment and underutilisation remain low overall, helping the nation absorb the impact of cost-of-living pressures and other economic challenges.

Line graph titled "Australian unemployment measures". With a y-axis ranging from 0 to 25%, Australian unemployment measures remain low by historical standards but have gradually increased over the past year.
Line graph titled “Australian unemployment measures”. With a y-axis ranging from 0 to 25%, Australian unemployment measures remain low by historical standards but have gradually increased over the past year.

In May, the share of the working age population either employed or actively seeking employment was unchanged at 66.8%. While participation has declined slightly from its November 2023 peak, it remains well above pre-pandemic levels. Australia’s job boom, along with cost-of-living pressures, has put upward pressure on participation and even encouraged a larger share of the population to work two or more jobs

Labour market conditions remain tight across the country, with the unemployment rate currently lowest in Western Australia, ahead of New South Wales and the nation’s capital. Conditions have softened in both New South Wales and Victoria, compared to broadly unchanged conditions in the other major states. 

Bar graph titled "Australian unemployment rate by state & territory". With a y-axis ranging from 0 to 5%, Western Australia, New South Wales and the ACT have the lowest unemployment rate in May 2024.
Bar graph titled “Australian unemployment rate by state & territory”. With a y-axis ranging from 0 to 5%, Western Australia, New South Wales and the ACT have the lowest unemployment rate in May 2024.

Assessment and implications

The latest labour market figures appear consistent with the Reserve Bank of Australia’s expectations regarding labour market conditions, and should have limited near-term impacts on monetary policy. Overall, the labour market is proving resilient, an important factor in helping Australia’s deal with cost-of-living pressures and other economic challenges. However, ongoing weakness in the Australian economy presents a considerable risk to the near-term labour market outlook.