Australia’s unemployment rate rises in June
Sydney (26 June)
Australia’s unemployment rate reached 4.4% – on a seasonally adjusted basis – in May, up by 0.3% points from a year earlier, but down from 4.5% in April, in line with recent economic confidence improvements.
Unemployment increased on the year across most states in May, data from the Australian Bureau of Statistics (ABS) show. But it remained steady in Queensland, at 3.7%, ABS data show.
Tasmania has the highest unemployment rate in Australia. The state’s seasonally adjusted unemployment rate has increased over the last year, from 4% in May 2025 to 5.3% in May 2026. It also increased by 0.3% points in May, from 5% in April, despite a drop in Australia’s national unemployment rate over the same period.
Australia’s unemployment rate may have declined on the month in May because of increased economic activity and confidence. Business confidence, future orders, and capital spending rose over the month, data from NAB’s Monthly Business Survey show.
Consumers’ 12-month forward economic expectation also increased by 4.9% in May, data from the Westpac-Melbourne Institute Consumer Sentiment Index report show. But their forward personal financial expectations dropped by 8.5%.
“[Business] conditions have eased since early 2026 but remain positive, and they are not as weak as confidence suggested a month ago. That supports the view that economic growth has slowed since late 2025 but is still moving,” NAB Head of Australian Economics Gareth Spence said on 9 June.
Increased economic activity could create challenges for the Reserve Bank of Australia (RBA).
“[Australia’s] unemployment rate will drift up and activity has to slow. That is part of what is going to bring inflation down,” RBA Governor Michele Bullock told reporters on 16 June, when the bank’s Monetary Policy Board voted unanimously to hold its cash rate target at 4.35%.
The Board held the RBA’s cash rate target steady to assess the economic impact of recent rate hikes and oil supply disruptions, Bullock said. But it is prepared to increase the bank’s cash rate target at future meetings to combat inflation, Bullock added.
Australia’s annual consumer inflation rate reached 4% in May, down from 4.2% in March, ABS data show. But its annual trimmed mean inflation rate – which excludes the largest positive and negative inflation contributors – rose from 3.4% in April to 3.6% in May.
By Avinash Govind