The Australian Bureau of Statistics (ABS) launched the newest labour power information at present (March 19, 2026) – Labour Drive, Australia – for February 2026 – which confirmed that the labour market had gone backwards. Whereas employment development remained optimistic, full-time work fell. The participation fee rose, which in some conditions signifies a optimistic outlook as employees re-enter the labour market to make the most of the elevated employment alternatives. On this case, I feel it alerts extra desperation as cost-of-living pressures rise, on condition that loads of older employees got here again into the labour market searching for work. Unemployment rose sharply (0.2 factors) to 4.3 per cent. Along with underemployment, there at the moment are 10.1 per cent of accessible labour not getting used it’s ludicrous to speak about Australia being near full employment. There’s substantial scope for extra job creation given the slack that’s current. The RBA’s declare that there’s vital extra demand within the total financial system, which they used on Tuesday to justify an additional fee hike, is difficult to reconcile towards this information.
The abstract seasonally-adjusted statistics for February 2026 are:
- Employment rose 17,800 (0.3 per cent).
- Full-time employment fell 30,500 (-0.3 per cent).
- Half-time employment elevated 79,400 (1.7 per cent).
- Unemployment rose 35,000 to 659,100.
- The unemployment fee rose 0.2 factors to 4.3 per cent.
- The participation fee elevated 0.2 factors to 66.9 per cent.
- The Employment-population ratio was regular on 64 per cent.
- Month-to-month hours labored fell 3.5 million (-0.17 per cent).
- Underemployment was regular on 5.9 per cent (falling 1.9 thousand to 902 thousand).
- The Broad Labour Underutilisation fee (the sum of unemployment and underemployment) rose 0.16 factors to 10.1 per cent.
- Total, there are 1,561.1 thousand folks both unemployed or underemployed.
The ABS press launch – Unemployment fee rises to 4.3% in February – famous that:
The seasonally adjusted unemployment fee elevated to 4.3 per cent in February …
The variety of unemployed folks grew by 35,000, contributing to the 0.2 share level enhance of the unemployment fee in February …
Employed folks grew by 49,000. Half-time employment rose by 79,000 folks, whereas full-time employment fell by 30,000 folks …
Hours labored fell 0.2 per cent this month, with extra folks working part-time hours as a substitute of full-time hours.
The expansion in each employment and unemployment has resulted in a 0.2 share level enhance to the participation fee, which was 66.9 per cent in February.
Abstract
1. I assume the RBA can be comfortable that the financial system is lastly wanting like it’s about to tank.
2. It’s exhausting to see how this information helps a view that the financial system is working above capability.
3. During the last 6 months, 60 per cent of the online employment change has been in part-time jobs, a certain signal of a weakening labour market the place companies hedge and reduce hours earlier than shedding employees.
4. The rising participation – which was significantly current amongst older employees – doesn’t in my opinion recommend a strengthening of employment alternatives, however moderately signifies elevated cost-of-living difficulties amongst households.
2. Whole labour underutilisation (sum of unemployment and underemployment) rose to 10.1 per cent, which signifies the extent of the wastage.
Employment development maintains tempo with underlying inhabitants development
Employment rose 48.9 thousand whereas the labour power rose 83.9 thousand, which meant that unemployment rose by 35 thousand.
- Employment rose 48,900 (0.3 per cent).
- Full-time employment fell 30,500 (-0.3 per cent).
- Half-time employment elevated 79,400 (1.7 per cent).
The next graph exhibits the expansion in whole, full-time, and part-time employment for the final 24 months.
The next desk exhibits the shifts during the last 6 months which helps to see the underlying development.
The Employment-to-Inhabitants ratio offers a measure of the state of the labour market that’s unbiased of the provision shifts within the labour market (pushed by the shifts within the participation fee).
The underlying working age inhabitants grows steadily whereas the labour power shifts with each underlying inhabitants development and the participation swings.
The next graph exhibits the Employment-Inhabitants ratio was steady on 64 per cent.
The subsequent graphs present the common month-to-month change in whole employment (first graph) and full- and part-time employment (second graph).
Clearly, the two-month consequence for 2026 doesn’t inform us a lot but.
For whole employment the month-to-month common adjustments had been:
- 2022 – 44.8 thousand
- 2023 – 30.8 thousand
- 2024 – 32.2 thousand
- 2025 – 12.7 thousand
- 2026 up to now – 37.5 thousand
Month-to-month hours labored fell 3.5 million (-0.17 per cent) in February 2026
Stronger on the again of development in full-time employment.
The next graph exhibits the expansion in month-to-month hours labored for the final 24 months, with the straight line being a easy linear regression to point development.
Unemployment rose 35,000 to 659,100 in February 2026
The unemployment fee rose 0.2 factors to 4.3 per cent.
Primarily, labour demand didn’t maintain tempo with the expansion in provide.
The next graph exhibits the evolution of the official unemployment fee since 1980.
What was the influence of the rising participation fee on unemployment in February 2026
The participation fee rose 0.2 factors, which added to the labour provide and meant that unemployment rose.
The query is what would the unemployment fee have been, given the employment development in February, if the participation fee had not additionally risen?
These ideas assist us reply one of these query:
- The labour power is a subset of the working-age inhabitants (these above 15 years previous). The proportion of the working-age inhabitants that constitutes the labour power known as the labour power participation fee. Thus adjustments within the labour power can influence on the official unemployment fee, and, consequently, actions within the latter have to be interpreted fastidiously. A rising unemployment fee might not point out a recessing financial system.
- The labour power can increase on account of common inhabitants development and/or will increase within the labour power participation charges (and vice versa).
The next Desk exhibits the breakdown within the adjustments to the primary aggregates (Labour Drive, Employment and Unemployment) and the influence of the autumn within the participation fee.
The change within the labour power in February 2026 was the result of two separate components:
- The underlying inhabitants development added 32.8 thousand individuals to the labour power. The inhabitants development influence on the labour power combination is comparatively regular from month to month; and
- The rise within the participation fee meant that there have been 51.1 thousand MORE employees within the labour power (relative to what would have occurred had the participation fee remained unchanged).
- The online consequence was that the labour power rose by 83.9 thousand.
Evaluation:
1. If the participation fee had not have risen in February 2026, whole unemployment, given the present employment degree, would have been 608.1 thousand moderately than the official depend of 659.1 thousand as recorded by the ABS – a distinction of 51.1 thousand employees (the ‘participation impact’).
2. With out the rise within the participation fee, the official unemployment fee would have been 4 per cent moderately than its present official worth of 4.3 per cent.
Broad labour underutilisation – rose 0.16 factors in February 2026
Given the drop in full-time employment and hours labored and the substantial enhance in part-time work, it’s exhausting to know how underemployment really fell marginally.
I think that consequence can be revised subsequent month.
- Underemployment was regular on 5.9 per cent (falling 1.9 thousand to 902 thousand).
- The Broad Labour Underutilisation fee (the sum of unemployment and underemployment) rose 0.16 factors to 10.1 per cent.
- Total, there are 1,561.1 thousand folks both unemployed or underemployed.
The next graph exhibits the evolution of underemployment and the Broad labour underutilisation fee since 1980.
Teenage labour market – extra part-time work
This month, youngsters noticed part-time employment develop considerably as the general part-time employment fell.
- Full-time employment fell 2.4 thousand (-1.3 per cent).
- Half-time employment rose 11.8 thousand (1.7 per cent).
- Whole teenage (15-19) employment rose 9.4 thousand (1.1 per cent).
The next desk summarises the shifts within the teenage labour marketplace for the month and during the last 12 months.
To place these adjustments right into a scale perspective (that’s, relative to dimension of the teenage labour power) the next information stories the shifts within the Employment-Inhabitants ratio for youngsters.
The Teenage Employment-Inhabitants ratios and their month-to-month adjustments in February 2026 had been:
- Males: 49.2 per cent – up 1 level.
- Females: 53.0 per cent – down 0.3 factors.
- Whole: 51.0 per cent – up 0.4 factors.
Conclusion
My normal warning to take care in decoding month-to-month labour power adjustments – they will fluctuate for quite a lot of causes and it’s imprudent to leap to conclusions on the again of a single month’s information.
- The labour market went backwards this month.
- Whereas employment development remained optimistic, full-time work fell.
- The participation fee rose, which in some conditions signifies a optimistic outlook as employees re-enter the labour market to make the most of the elevated employment alternatives. On this case, I feel it alerts extra desperation as cost-of-living pressures rise, on condition that loads of older employees got here again into the labour market searching for work.
- Unemployment rose sharply (0.2 factors) to 4.3 per cent.
- Along with underemployment, there at the moment are 10.1 per cent of accessible labour not getting used it’s ludicrous to speak about Australia being near full employment. There’s substantial scope for extra job creation given the slack that’s current.
- The RBA’s declare that there’s vital extra demand within the total financial system, which they used on Tuesday to justify an additional fee hike, is difficult to reconcile towards this information.
That’s sufficient for at present!
(c) Copyright 2026 William Mitchell. All Rights Reserved.