The number of employed people across Australia has lifted by 65,000 people in December 2025 in a move that some economists say is unexpected.
According to the Australian Bureau of Statistics (ABS), the seasonally adjusted unemployment rate fell to 4.1 per cent in December, driven by a surge in employment.
KPMG chief economist Dr Brendan Rynne said the bulk of new jobs in December are usually part-time or casual, but pointed out that 55,000 of the new additions were for full-time roles. To Dr Rynne, this makes the figure even more significant and shows the strength of the economy is being maintained.
“The creation of more than 65 thousand new jobs last month shows a much stronger labour market than any of us anticipated,” Dr Rynne said.
“These figures, while better than expected, will not come as a huge surprise to the RBA. It is well aware that it is inflation not the labour market that is the ongoing issue driving interest rate uncertainty.
“KPMG expects the RBA to maintain a cautious ‘wait and see’ approach and not rush to hike rates. Instead, we believe it will opt to sit back and monitor if inflation will naturally wind down this year, without further intervention.”
ABS head of labour statistics Sean Crick said the growth in December saw more 15-24 year olds moving into employment, contributing to the rise in overall employment and the subsequent fall in the unemployment rate.
Men made up the bulk of new employment, rising by 49,000 people, while female employment recorded a smaller increase of 17,000.
“The growth in employed people led to the participation rate rising slightly to 66.7 per cent. This was despite a 30,000 person drop in unemployment,” Crick said.
“The number of hours worked was up by 0.4 per cent, in line with the 0.4 per cent rise in employment.
“In December 2025, seasonally adjusted monthly hours worked reached a record high of over 2 billion hours for the first time.”
Alongside the slip in the unemployment rate, the underemployment rate fell by 0.5 percentage points to 5.7 per cent in December.
Crick said fewer young people were underemployed in December, with the 15-19 year old underemployment rate falling by 2.1 percentage points to 17.4 per cent.
For all ages, the male underemployment rate fell by 0.8 percentage points to 4.6 per cent, and the female underemployment rate fell by 0.1 percentage points to 6.9 per cent in December.
The underutilisation rate, which typically exhibits greater month‑to‑month changes than other labour force indicators, fell to 9.8 per cent in December, down 0.7 percentage points.
Crick also noted that the trend unemployment rate fell marginally to 4.2 per cent in December.
“Trend employment grew by around 25,000 people, or 0.2 per cent, in December, and 1.2 per cent in the last 12 months,” Crick said.
“Monthly hours worked rose 0.2 per cent, in line with the 0.2 per cent increase in employment.
“Annually, the number of hours worked grew by 1.0 per cent, which was slightly below the 1.2 per cent rise in employment.’
In trend terms, the participation rate stayed at 66.8 per cent in December.
The trend underemployment rate continued to sit at 5.9 per cent, remaining unchanged for the whole of 2025. The underutilisation rate stayed at 10.1 per cent in December.