Australian labour market – slight improvement after two bad months

For the last two months, the Australian labour market has gone backwards. The deterioration seems to have stabilised in October. The Australian Bureau of Statistics (ABS) released the latest labour force data today (November 13, 2025) – Labour Force, Australia – for October 2025, which reveals a slight drop in official unemployment and underemployment and a stable employment to population ratio – marking time. The best sign this month is that full-time employment growth was relatively strong. However, there are now 10 per cent of available labour not being used in one form or another, so it is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

The summary seasonally-adjusted statistics for October 2025 are:

• Employment rose 42,200 (0.3 per cent).
• Full-time employment rose 55 thousand (0.5 per cent).
• Part-time employment fell 13 thousand (-0.3 per cent).
• Unemployment fell 17,000 (-2.5 per cent) to 665,400.
• The unemployment rate fell 0.1 point to 4.3 per cent.
• The participation rate was stable at 67 per cent.
• The Employment-population ratio was steady at 64 per cent.
• Monthly hours worked rose 11 million (0.5 per cent).
• Underemployment fell 0.2 points to 5.7 per cent (falling 28.8 thousand to 877.1 thousand).
• The Broad Labour Underutilisation rate (the sum of unemployment and underemployment) fell 0.3 points to 10.1 per cent.
• Overall, there are 11542.5 thousand people either unemployed or underemployed.

The ABS press release – Unemployment rate falls to 4.3% – noted that:

The seasonally adjusted unemployment rate fell to 4.3 per cent in October …

… This month more unemployed people moved into employment compared to a typical October …

The fall in part-time employment was driven by the female workforce, with female part-time employment falling by 21,000 people …

Summary

1. After a few months of deteriorating outcomes, the data for October pointed to a stabilising situation and it might be that the rise in unemployment over the last several months has ended for now.

2. Two years ago, the official unemployment rate was 3.5 per cent. Now it is 4.3 per cent.

3. The decline in both official unemployment and underemployment, as full-time employment growth dominated was a good outcome.

Employment growth improves in October

Employment growth outpaced the growth in the underlying working age population this month.

• Employment rose 42,200 (0.3 per cent).
• Full-time employment rose 55 thousand (0.5 per cent).
• Part-time employment fell 13 thousand (-0.3 per cent).

The following graph shows the growth in total, full-time, and part-time employment for the last 24 months.

The following table shows the shifts over the last 6 months which helps to see the underlying trend.

The Employment-to-Population ratio provides a measure of the state of the labour market that is independent of the supply shifts in the labour market (driven by the shifts in the participation rate).

The underlying working age population grows steadily while the labour force shifts with both underlying population growth and the participation swings.

The following graph shows the Employment-Population ratio was steady at 64 (for the last three months).

The next graphs show the average monthly change in total employment (first graph) and full- and part-time employment (second graph).

For total employment the monthly average changes were:

• 2022 – 44.8 thousand
• 2023 – 30.8 thousand
• 2024 – 32.6 thousand
• 2025 so far – 16 thousand (slight rise on October)

Monthly hours worked rose 10.7 million (0.54 per cent) in October 2025

The following graph shows the growth in monthly hours worked for the last 24 months, with the straight line being a simple linear regression to indicate trend.

Unemployment fell 17 thousand to 665,400 in October

The official unemployment rate fell 0.1 point to 4.3 per cent.

With participation stable, employment growth outpaced the underlying growth in the working age population – a good sign.

The following graph shows the evolution of the official unemployment rate since 1980.

Broad labour underutilisation – fell 0.3 points in October

• Underemployment fell 0.2 points to 5.7 per cent (falling 28.8 thousand to 877.1 thousand).
• The Broad Labour Underutilisation rate (the sum of unemployment and underemployment) fell 0.3 points to 10.1 per cent.
• Overall, there are 11542.5 thousand people either unemployed or underemployed.

The following graph shows the evolution of underemployment and the Broad labour underutilisation rate since 1980.

Teenage labour market – slight improvement

• Total teenage (15-19) employment rose 8.2 thousand (1 per cent) in October 2025.
• Full-time employment rose 12.3 thousand (6.5 per cent).
• Part-time employment fell 4.1 thousand (0.6 per cent).

The following table summarises the shifts in the teenage labour market for the month and over the last 12 months.

To put these changes into a scale perspective (that is, relative to size of the teenage labour force) the following graph shows the shifts in the Employment-Population ratio for teenagers.

The Teenage Employment-Population ratios and their monthly changes in October 2025 were:

• Males: 49.1 per cent – up 1.3 points.
• Females: 52.3 per cent – dowm 0.5 points.
• Total: 50.7 per cent – up 0.4 points.

Conclusion

My standard warning to take care in interpreting monthly labour force changes – they can fluctuate for a number of reasons and it is imprudent to jump to conclusions on the back of a single month’s data.

• This month’s data suggests the decline over the last several months has ended and the labour market has stabilised.
• The most positive sign was the relatively strong growth in full-time employment, partly offset by a decline in part-time work.
• This allowed both the unemployment rate and the underemployment rate to fall – a good outcome.
• It remains a fact that with 10.1 per cent of available labour not being used it is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

That is enough for today!

(c) Copyright 2025 William Mitchell. All Rights Reserved.