Unemployment tipped to climb again after surprise drop
Unemployment in Australia is expected to rise again after a surprise decline.
The Australian Bureau of Statistics will publish its first workforce figures for 2026 on Thursday, with a slight increase to 4.2 per cent expected for January.
The seasonally adjusted rate fell to 4.1 percent in December, surprising forecasters.
NAB senior economist Taylor Nugent said a course correction was possible for January data.
20,000 new jobs are expected to be added to the economy this month.
“The past three Januarys have seen a 10 to 15 basis point increase in the unemployment rate, which was partially reversed in February because there were more people unemployed but attached to a job they were waiting to start than normal before the pandemic,” Mr. Nugent said.
“This impact appears to be decreasing year on year, but following the surprise two-tenths drop in December, it supports the expectation of some reversal in January.”
The surprise drop in the number of unemployed people was due to a 65,000 increase in the number of workers in December and more 15- to 24-year-olds starting to work.
Wage figures released on Wednesday showed that pay packages have not kept pace with inflation.
Seasonally adjusted wages rose to 3.4 percent on an annualized basis through December, but remained below annual inflation of 3.8 percent.
Real wages fell for the first time since September 2023.
Finance Minister Jim Chalmers did not say he expected wages to rise above the rate of rising costs.
“It is clear from the Central Bank’s forecasts that the inflation figure will be higher than we would like for a short period this year,” he said.
“Inflation peaks in the middle of the year and then declines, and this will have implications for real wages.”
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