Australia’s labour market has tightened further as employment has risen strongly, supported by youth hiring and record hours worked.Australia’s seasonally adjusted unemployment rate fell to 4.1 per cent in December, according to data released by the Australian Bureau of Statistics.
Employment increased by 65,000 people over the month, with full-time employment rising by 55,000 and part-time employment lifting by 10,000.
Sean Crick, ABS head of labour statistics, said: “This month we saw more 15-24 year olds moving into employment, contributing to the rise in overall employment and the fall in the unemployment rate.”
Employment growth was driven largely by male workers, with male employment increasing by 49,000 people, while female employment rose by 17,000.
“The growth in employed people led to the participation rate rising slightly to 66.7 per cent. This was despite a 30,000 person drop in unemployment,” Crick said. “The number of hours worked was up by 0.4 per cent, in line with the 0.4 per cent rise in employment.”
“In December 2025, seasonally adjusted monthly hours worked reached a record high of over 2 billion hours for the first time.”
Underemployment and underutilisation also declined in December. The underemployment rate fell by 0.5 percentage points to 5.7 per cent.
“Fewer young people were underemployed in December, with the 15-19 year old underemployment rate falling by 2.1 percentage points to 17.4 per cent,” Crick said.
Across all age groups, the male underemployment rate fell by 0.8 percentage points to 4.6 per cent, while the female underemployment rate declined by 0.1 percentage points to 6.9 per cent.
Meanwhile, the underutilisation rate fell to 9.8 per cent in December, down 0.7 percentage points.
In trend terms, the unemployment rate edged down to 4.2 per cent in December.
“The trend unemployment rate fell marginally to 4.2 per cent in December,” Crick said. “Trend employment grew by around 25,000 people, or 0.2 per cent, in December, and 1.2 per cent in the last 12 months.
“Monthly hours worked rose 0.2 per cent, in line with the 0.2 per cent increase in employment.
“Annually, the number of hours worked grew by 1.0 per cent, which was slightly below the 1.2 per cent rise in employment.”
The trend participation rate held steady at 66.8 per cent in December, while the trend underemployment rate remained unchanged at 5.9 per cent throughout 2025. The trend underutilisation rate also stayed steady at 10.1 per cent.
