A larger-than-expected decline in the unemployment rate has dampened hopes of further rate cuts in the coming months.
The unemployment rate eased to 4.3 per cent in October, down from 4.5 per cent in seasonally adjusted terms, according to the Australian Bureau of Statistics (ABS) data.
Unemployment fell back by 17,000 after a jump last month, while the number of employed people rose by 42,000.
Full-time employment rose by 55,000. The number of females in full-time employment rose by 29,000, while the number of males rose by 26,000.
Commenting on the data, ABS head of labour statistics, Sean Crick, said: “The October unemployment rate is in line with June, July and August 2025.
“This month, more unemployed people moved into employment compared to a typical October.”
Lower unemployment will likely dampen hopes of any near-term interest rate cuts.
In response to the labour data, National Australia Bank (NAB) changed its cash rate forecast, now expecting rates to remain on hold for an “extended period”, with no further cuts predicted.
“We now see the Reserve Bank of Australia (RBA) on hold at 3.6 per cent through to the end of our forecast horizon (previously we forecast a 25-basis point cut in May),” NAB’s chief of economics, Sally Auld, said.
“Growth has accelerated and the economy is already exhibiting signs of elevated capacity utilisation. The acceleration in house price growth and investor lending also argues for stable policy at a minimum.
“For the RBA, the appropriate stance will be to remain broadly around neutral, for now.”
Recent data generally supports the case to keep rates on hold rather than shift towards lowering them further.
Lending rose sharply in the September quarter, with investor lending soaring to record highs, while house prices continue to climb.
The RBA’s Monetary Policy Board will hold its final meeting of the year on 8 and 9 December.
[Related: Investor lending surges to record high]
