The Australian Bureau of Statistics (ABS) has revealed a drop in the unemployment rate to 4.3 per cent over October 2025 in its latest Labour Force figures, down from 4.5 per cent in September.
ABS head of labour statistics, Sean Crick, said October’s unemployment rate is “in line with June, July, and August 2025”.
According to the bureau, the number of unemployed people fell by 17,000 over October, while the number of employed people rose by 42,000, contributing to the decreased rate.
Crick added that October 2025 saw “more unemployed people [move] into employment compared to a typical October”.
Full-time employment rose by 55,000 people in October with the increase including 29,000 more women and 26,000 more men in full-time roles.
The rise in full-time employment was contrasted with a fall in part-time jobs, which dropped by 13,000 over the month.
Female part-time employment declined by 21,000, partly offset by an 8,000 increase in part-time roles among men.
The participation rate has remained steady at 67.0 per cent in October. Male participation lifted 0.2 percentage points to 71.0 per cent, while female participation fell 0.2 percentage points to 63.1 per cent.
The employment-to-population ratio remained at 64.0 per cent, signalling consistent engagement in the labour market despite recent volatility in unemployment figures.
Hours worked rose by 0.5 per cent in October, outpacing the 0.3 per cent rise in employment, suggesting ongoing demand for labour even as broader economic conditions remain mixed, according to the ABS.
The underemployment rate fell by 0.2 percentage points to 5.7 per cent in October — 0.5 percentage points lower than the same time last year and 3.0 percentage points below March 2020 levels.
The underutilisation rate, which combines unemployment and underemployment, declined by 0.3 percentage points to 10.0 per cent, also sitting well below pre-pandemic levels.
In trend terms, the unemployment rate remained at 4.4 per cent in October.
“Trend employment has grown by around 27,000 people, or 0.2 per cent from September to October, and 1.5 per cent in the last 12 months,” Crick said.
“Monthly hours worked have risen by 0.1 per cent, which was slightly lower than the 0.2 per cent rise in employment. Annual growth in hours worked in October has been at 1.4 per cent, also slightly lower than the 1.5 per cent rise in employment over the last 12 months.”
In trend terms, the participation rate edged up to 67.0 per cent, while the employment-to-population ratio held steady at 64.0 per cent.
The underemployment rate remained at 5.8 per cent, and the underutilisation rate was stable at 10.1 per cent.
VanEck head of investments and capital markets Russel Chesler said the fall in the unemployment rate was slightly stronger than expected.
“The unemployment rate fell 10 basis points more than the market was expecting, coming in at 4.3 per cent in October. This drop is in line with our expectations,” he said.
“As stated by Governor Bullock at a recent address, the Australian labour market remains ‘tight’, which means the RBA can continue to focus on reducing inflation as its primary concern.
“By and large, the Australian economy appears to be in good shape, notwithstanding the recent increase to inflation. Consumer sentiment is at a seven-year high, surging 12.8 per cent to 103.8 points in November.”
Chesler added that the strength of Australia’s labour market reduces the likelihood of further rate cuts this year.
“Pending any unforeseen macroeconomic or geopolitical incidents, there is a chance we may already be at the terminal rate for the current interest rate cycle, leaving the cash rate at 3.6 per cent for the foreseeable future,” he said.
Betashares chief economist David Bassanese said the latest data has “effectively wiped out” any possibility of a surprise rate cut at the Reserve Bank’s final meeting of the year.
He added that the data should “lessen fears that the employment market is on the cusp of serious deterioration”, adding that while employment growth has been volatile this year, the broader picture shows only a modest softening.
“The challenge for the economy and those counting on lower interest rates, however, is that some modest easing in labour market conditions may be required to ensure a reduction in underlying inflation,” he said.
State Street Investment Management APAC economist Krishna Bhimavarapu agreed that the data supports the Reserve Bank’s decision to remain on hold.
“The decline in the unemployment rate, despite an unchanged participation rate, suggests underlying resilience,” he said. “However, caution is warranted… overall, the data supports the RBA’s decision to stay on hold rather than shift toward a tightening stance.”
