The Australian Bureau of Statistics (ABS) has reported the seasonally adjusted unemployment rate has not budged from its 4.1 per cent position.
This is lower than recent months, with the seasonally adjusted rate hitting 4.5 per cent in September before gradually slipping down to the 4.1 per cent position.
This is relatively in line with the Reserve Bank of Australia’s (RBA’s) recent forecasts, which projects the unemployment rate to be broadly stable in the near term, before rising gradually to 4.6 per cent by mid-2028 because of a period of GDP growing below its potential rate.
“Our assessment is that labour market conditions will be broadly stable in the near term; while some leading indicators of labour demand suggest that conditions could ease a little in coming quarters, this is balanced by the stronger near-term outlook for economic activity,” the RBA reported this month.
“From late 2026, the unemployment rate is forecast to edge higher as GDP growth slows. Wages growth is forecast to be a little higher than in the November Statement, but to ease slightly from late 2027 as the labour market moves closer to balance.”
ABS head of labour statistics Sean Crick said the amount of employed people grew by 18,000 in January 2026. Full-time employment jumped by 50,000, which was partly offset by a fall of 33,000 people in part-time employment.
Crick added the participation rate slipped year-on-year to 66.7 per cent in January, down 0.6 percentage points lower than the record high measured in January 2025.
The underemployment rate rose 0.2 percentage points to 5.9 per cent in January. The underutilisation rate also grew by 0.2 percentage points to 10.0 per cent.
“Youth underemployment rose 1.0 percentage point to 14.8 per cent. This rise largely reversed the fall recorded last month,” Crick said.
Meanwhile, hours worked in January were up by 0.6 per cent. Fewer people reported working less hours than typical Januarys due to being on leave, with Crick saying this contributed to hours worked growing more strongly than employment.
Full-time hours worked grew by 0.7 per cent, while part-time hours worked only rose by 0.1 per cent.
“On average, part-time employed persons worked more hours this month, with part-time hours worked per person increasing by 0.8 per cent,”Crick said. “However, the total number of part-time hours worked only rose 0.1 per cent, with the number of people employed part-time falling 0.7 per cent.”
Trend unemployment also fell in January to 4.1 per cent, down from 4.2 per cent in December. This comes as the number of unemployed people decreased for the fourth consecutive month.
“Trend employment and hours worked both grew by 0.2 per cent in January, while annually, hours worked grew faster than employment,” Crick said.