Australia’s Job Market Surges in October, Easing Pressure for Further RBA Rate Cuts

Australia’s job market recorded a surprising surge in October as employers ramped up full-time hiring, pushing the unemployment rate down from a four-year high. The latest figures from the Australian Bureau of Statistics revealed a net employment gain of 42,200 positions, significantly higher than market forecasts of 20,000. Full-time roles jumped by 55,300, underscoring strong labor demand. The participation rate remained steady at 67%, while total hours worked increased by 0.5%. As a result, the jobless rate fell to 4.3% from 4.5%, marking the lowest level since November 2021.

The stronger-than-expected report strengthened the Australian dollar by 0.3% to $0.6560, while three-year government bond futures dropped to their lowest in over seven months. Financial markets reacted swiftly, slashing the likelihood of further monetary easing from the Reserve Bank of Australia (RBA). The probability of a rate cut in May 2025 fell to 25%, down sharply from nearly 70% prior to the jobs data.

Economists noted the mixed implications for the central bank. Harry Murphy Cruise, head of economic research at Oxford Economics Australia, said the robust labor market “risks putting upward pressure on prices at a time when inflation is already rising.” The RBA, which has cut interest rates three times this year to 3.6%, recently warned that inflation is likely to remain above its 2–3% target until mid-2026. The bank expects only modest labor market loosening ahead, with unemployment hovering near 4.4%.

With business sentiment improving and consumer confidence rebounding for the first time in nearly four years, analysts now believe the RBA may pause further rate cuts to avoid fueling inflation. According to EY Chief Economist Cherelle Murphy, the central bank “may not be able to ease much further without reigniting price pressures.”