Australian unemployment has fallen by 65,000 people to 1.715 million in May 2025, driven by a contraction in the overall Australian workforce by 206,000 people.
The new data from Roy Morgan shows that the 0.3 per cent fall in unemployment to 10.9 per cent of the total workforce. However, the research company noted this wasn’t due to people finding jobs, but due to those were were looking for work giving up and leaving the workforce altogether.
Roy Morgan estimates the overall workforce size – which adds together both the employed and unemployed – was at 15,740,000 people and represented 68.3 per cent of Australians aged 14 and over. This is the smallest estimated workforce so far this year and the largest monthly workforce contraction since October 2021 – nearly four years ago.
The contraction in the workforce led to key employment indicators falling in May, including fewer people employed full-time, fewer people employed part-time, and fewer people unemployed and looking for work.
There were also fewer people underemployed and looking for more work. This is the first time since January 2022 that all four of these key indicators dropped in the same month.
The research firm’s estimates show that just over 14 million people were employed in March, down 141,000 from a month ago – and it’s the lowest level of employment for over 18 months since November 2023. This represents 60.8% of Australians aged 14 and above, with Roy Morgan CEO Michele Levine saying this is the lowest share in employment for over four years since March 2021 – during the middle of the pandemic.
“Perhaps most concerningly, full-time employment has dropped to under 9 million – its lowest level for nearly two years since September 2023 – after falling in each of the past two months,” Roy Morgan CEO Michele Levine said.
“Taken together, these indicators show economic weakness with fewer jobs available and a workforce contraction.”
Levine said these are not healthy figures indicative of a strong and growing economy.
These trends are also backed up by the most recent GDP estimates data from the Australian Bureau of Statistics (ABS) for the March quarter 2025, which showed quarterly growth of only 0.2 per cent and annual growth of only 1.3 per cent – “both figures which indicate a per capita decline when Australia’s growing population is taken into account,” Levine said.
“Fortunately for the Albanese Government, they secured a comfortable re-election victory in early May and now have three years to return the Australian economy to sustainable growth and tackle the enduring problem of high labour under-utilisation.”
Looking back over the three years since the 2022 Federal Election, Levine said there has been a rapid growth in population (up 1.82 million), workforce (up 1.33 million), and employment (up 781,000). There has also been a significant increase in unemployment (up 546,000 since May 2022).
“However, these latest figures show that the re-elected Albanese Government has a significant challenge ahead as it enters its second term, developing policies to find employment opportunities for the millions of Australians looking for work (unemployed) or looking for more work (under-employed).”