Australia employment rose 17.9k in March (exp 20k) with unemployment steady at 4.3%, underscoring labour market resilience and giving the RBA room to keep tightening as inflation risks remain elevated.
Summary:
Australia employment rose +17.9k in March (exp +20k; prior +49.6k revised).
Unemployment rate held at 4.3% (exp 4.3%; prior 4.3%).
Full-time jobs surged +52.5k, offset by a -34.6k fall in part-time roles.
Participation rate edged down to 66.8% (exp 66.9%; prior 66.9%).
Labour market remains resilient heading into the Iran war shock.
RBA tightening expectations remain intact, with markets pricing further hikes
Australia’s labour market remained resilient in March, with employment rising broadly in line with expectations and the unemployment rate holding steady, suggesting the economy entered the current geopolitical shock from a position of strength.
Data from the Australian Bureau of Statistics showed employment increased by 17,900 in March, slightly below expectations for a 20,000 gain and following a strong 49,600 rise in February. The composition of jobs was notably firm, with full-time employment jumping by 52,500, more than offsetting a 34,600 decline in part-time roles.
The unemployment rate was unchanged at 4.3%, matching both market expectations and the prior reading, while the participation rate edged slightly lower to 66.8% from 66.9%. Hours worked rose 0.5%, adding to evidence of underlying labour demand.
Taken together, the data point to a labour market that remains tight, with employment growth continuing at a solid pace. Over the March quarter, employment rose by 93,100, averaging around 31,000 jobs per month—the strongest quarterly performance since the second half of 2024.
Importantly, this strength comes just ahead of the full economic impact of the Iran conflict, which has driven a surge in energy prices and heightened global uncertainty. As such, the March data likely represent the last “clean” read on labour conditions before those headwinds begin to materialise.
Despite expectations that the unemployment rate will drift higher later this year as growth slows, current conditions remain broadly in line with the RBA’s February forecasts, which had pencilled in unemployment at 4.3% through mid-2026.
For policymakers, the resilience in employment reinforces the view that the economy retains capacity to absorb tighter financial conditions. With inflation risks elevated—particularly from energy—the labour market’s strength gives the RBA greater flexibility to continue tightening policy if needed.
Markets are already reflecting this dynamic, with roughly 18 basis points of tightening priced for the May meeting and around 56 basis points over 2026, as investors weigh persistent inflation pressures against emerging growth risks.
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Reinforces a hawkish RBA bias in the near term. Labour market strength provides cover for further tightening despite looming growth headwinds from the energy shock, supporting AUD and front-end rates.
This article was written by Eamonn Sheridan at investinglive.com.