FinanceABC News & HeadlinesCOVID era high of 4.6pc in August
Australia's unemployment rate has risen to 4.6 per cent in August, the highest since the COVID era, and an interest rate rise is still expected.
The national unemployment rate rises to 4.6 per cent, up from 4.5 per cent in July, in seasonally adjusted and trend terms.
Australia's unemployment rate climbed to 4.6 per cent in August, up from 4.5 per cent in July, hitting a post-COVID high.
The labour force grew by 67,700 people in August, but employment growth could not keep pace with the surge of new job seekers.
Despite the higher unemployment, economists still expect the RBA to lift interest rates next week to ease pressure on inflation.
All four major banks and most money market traders expect the RBA to lift interest rates next week, so check your mortgage repayments now.
Australia's unemployment rate drifted higher in August.
The national unemployment rate rose to 4.6 per cent, up from 4.5 per cent in July, in seasonally adjusted and trend terms.
It is the highest unemployment rate in the post-COVID era.
On Tuesday, RBA governor Michele Bullock said she thought an unemployment rate of somewhere between 4.5 and 5 per cent would "take enough heat out of the labour market" to ease pressure on inflation.
In recent weeks, all four major banks and the bulk of money market traders have also announced that they expect the RBA to lift interest rates next week to try to clamp down on economic activity and squash inflation.
Oscar Guth, economist for Oxford Economics Australia, said the higher unemployment rate should ease "some of the tightness" in the labour market but he still thought the RBA would lift rates next week.
Participation rate back near record high
The ABS data show that Australia's labour force increased by another 67,700 people in August, which pushed the participation rate up to 67.1 per cent, from 66.9 per cent in July.
That returns the participation rate to just below its record high of 67.2 per cent.
The labour force increased by 67,700 people last month because an extra 39,500 people found employment and an extra 28,200 people were recorded as being officially unemployed.
The unemployment rate still increased, in that situation, because the growth in employment failed to keep pace with the influx of people into the labour force.
Earlier this year, a working paper published by the International Monetary Fund (IMF) found that the RBA's rapid rate hikes in the post-COVID era had seen the supply of labour increase in Australia, because many Australians in highly indebted households entered the workforce, or took on second or third jobs, to pay for their rising interest payments.
"This August we recorded a higher proportion of people who were previously not in the labour force moving to being unemployed, compared to recent years," Sean Crick, ABS head of labour statistics, said on Thursday.
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