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Australia’s labour force report for June was solid overall…
…but labour market conditions clearly softened in the June quarter overall amid heightened conflict-related uncertainty.
The total labour underutilisation rate rose to the highest level since late 2021.
The monthly data have been volatile.
Some of that volatility is likely to be genuine, with the sharp rise in employment in June possibly reflecting progress on the Middle East situation (at the time).
The ABS noted that “[p]art of the growth in employment this month came from those who were waiting to start a job in May”. The ABS noted a similar positive effect on employment in May.
In other words, firms pushed back start dates for new hires until they had a bit more certainty on the near-term outlook.
Renewed tensions in the Middle East and sharply higher oil prices may weigh again on hiring.
The ABS has also been transitioning the Labour Force Survey to new modernised systems and questionnaire since April. The May and June surveys both rotated 2 of the 8 sample cohorts instead of the usual 1 group rotation.
For June, the ABS noted that it adjusted the weighting of one rotation group in New South Wales and Victoria:
“[t]he ABS identified that data from one of the incoming rotation groups for June in New South Wales and Victoria were considerably different in their labour force characteristics, compared with the rest of the sample in these states. These differences were outside the tolerance ranges of several of our quality assurance tests. In response, the ABS adjusted the influence of around 2,700 respondents (approximately 6% of June sample), from these parts of the sample by using adjusted weights in line with our well-established methods to ensure that the Labour Force data is representative of the population.
1. Australia’s unemployment rate was unchanged at 4.4% in June (in unrounded terms it rose from 4.37% to 4.43%).
Measured employment in Australia rose +76.3k m/m in June following a rise of +44k m/m in May.
The employment-to-population ratio jumped +0.25ppts to 64.04% in June - the highest since July 2025.
2. The unemployment rate in June was still clearly higher than the RBA’s May SMP track. The jobless rate averaged 4.43% in Q2 compared with the RBA’s 4.2% forecast.
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