Australia’s unemployment rate remained unchanged at 4.1% in January, as per official data released. The Australian Bureau of Statistics reported a rise of 50,500 in full-time employment, offset by a decline of 32,700 in part-time jobs. Economists had anticipated a slight increase to 4.2% in January.
The participation rate, indicating the proportion of working-age individuals employed or actively seeking work, stood at 66.7% in January. This was slightly lower than the record-high of 67.3% recorded a year earlier. The total hours worked in Australia increased by 0.6% to 2.01 billion between December and January.
Australia’s central bank raised its key interest rate for the first time in over two years on February 3. The Reserve Bank of Australia increased the cash rate target from 3.60% to 3.85%. This move came in response to a rise in inflation, with the bank noting a substantial increase in inflation levels in the latter half of 2025.
The Monetary Policy Board of the Reserve Bank of Australia stated that inflation is expected to remain above the 2-3% target band for an extended period. It highlighted faster-than-expected growth in private demand, increased capacity pressures, and slightly tight labor market conditions. The bank’s updated forecasts project annual CPI growth to reach 4.2% in June 2026 before easing to 2.9% in June 2027.
