Unemployment shock tempers rate hike expectations

Friday 16 October 2026

Thursday’s labour force shocker from the Australian Bureau of Statistics (ABS), which saw the nation’s unemployment rate rise to a five-year high of 4.7% (4.6% in trend terms), has tempered the financial market’s expectations for another interest rate hike.

The unemployment rate is now tracking well above what the Reserve Bank had forecast in its recent Statement of Monetary Policy:

Australia’s headline unemployment rate of 4.7% is already tracking where the IMF forecast it would be by the end of 2027.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.