Australia has more workers, but barely more work

The ABS Labour Force Survey shows employment fell by 15,800 people in July, while the unemployment rate increased to 4.5%. Monthly hours worked fell more sharply, down 0.6%.

The more revealing figures, however, are over the past year. Australia has 191,900 more employed people than in July 2025, an increase of 1.3%. Yet total hours worked have barely risen, just 0.2%.

There are more Australians with jobs, but the total amount of work being performed is basically flat.

Other indicators point in the same direction. The number of unemployed Australians has risen by 45,100, or 7.0%, over the year. Underemployment has increased from 5.9% to 6.4%, while the employment-to-population ratio has fallen from 64.2% to 63.9%.

The result also complicates monetary policy. At 4.5%, unemployment has already reached the level the RBA forecasts for the December quarter, while the Bank says labour-market conditions have eased more than expected.

Ultimately this data release will be viewed as putting downward pressure on interest rates, so potentially good for mortgage holders.

More workers, but barely more work
Australian labour market — seasonally adjusted
Indicator	Jul 2025	Jul 2026	Change
Employed people	14.62m	14.81m	+1.3%
Hours worked	1,994m	1,998m	+0.2%
Unemployed people	646,400	691,500	+7.0%
Unemployment rate	4.3%	4.5%	+0.2 pts
Underemployment rate	5.9%	6.4%	+0.5 pts
Employment-to-population ratio	64.2%	63.9%	−0.3 pts