Australia’s unemployment rate rises in April
Sydney (21 May)
Australia’s unemployment rate rose to 4.5% – on a seasonally adjusted basis – in April, up from 4.1% a year earlier, following a month of elevated fuel pressures and economic uncertainty.
Unemployment increased on the year across most states in April. But it remained steady in Queensland, at 4.2%, and fell in Western Australia, from 4.2% to 4.1%, data released by the Australian Bureau of Statistics (ABS) on 21 May show.
Tasmania has the highest unemployment rate in Australia. The state’s seasonally adjusted unemployment rate increased from 3.8% to 5% between April 2025 and 2026, data released by the Australian Bureau of Statistics (ABS) on 21 May show.
Tasmania’s unemployment rate, in trend terms, rose from 3.8% to 4.8% over that period. And it may rise again in the coming months. The state’s Treasury expects its trend-basis unemployment rate to average 5% in the 2026-27 fiscal year to 30 June, largely because of the US-Israeli war in Iran, it said today.
The Commonwealth Bank similarly expects Australia’s unemployment rate to peak at 4.6% in June 2027, according to forecasts released on 20 May. The Iran war, rising inflation expectations, and housing market challenges are the main risks to Australia’s economic outlook, the bank said.
Inflation could be more severe than expected if high fuel prices cause inflation expectations to rise, Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter told Bloomberg’s Forum for Investment Managers on 19 May.
“If expectations rise persistently, it becomes harder for the central bank to bring inflation back to target … Doing so may require a more substantial slowing of economic activity, as we saw during the early 1990s recession,” Hunter said.
Australia experienced a recession in 1991-1992, partly because of high interest rates and recessions in other countries. The country’s unemployment rate rose from 6.1% in January 1990 to 11.2% in December 1992, ABS data show.
But futures markets do not expect the RBA to raise interest rates at its June meeting. Futures prices indicate that there is 91% chance that the central bank holds interest rates steady in June, data from the Australian Stock Exchange (ASX) show.
By Avinash Govind